Global stock markets traded in narrow ranges on Monday as investors assessed the implications of the failed coup in Turkey.
KEEPING SCORE: In Europe, France’s CAC-40 was flat at 4,372 while Germany’s DAX rose 0.1 percent to 10,079. The FTSE 100 index of leading British shares was 0.5 percent higher at 6,699. U.S. stocks were poised for a solid opening, with Dow futures and the broader S&P 500 futures of 0.3 percent.
TURKEY’S COUP: The failed coup on Friday in Turkey has had little impact on global markets though it knocked 5.7 percent off the Borsa Istanbul 100 Index. The Turkish lira, however, recovered its poise to recoup some of the losses in the aftermath of the coup attempt to trade around 1.8 percent higher at 2.9630 per dollar. Volatility in Turkish shares and the currency is expected to remain high over coming days as investors assess the political implications of the failed coup attempt. The rebellion, which saw warplanes firing on key government installations and tanks rolling into major cities, was quashed by loyal government forces and masses of civilians who took to the streets. The country’s top military brass did not support the coup.
ANALYST TAKE: “In the medium-term, the Turkish economy and corporate earnings could suffer because of the likely negative effects the political situation and on-going terrorist threats pose on the tourism industry,” said Fawad Razaqzada, market analyst at Forex.com. Razaqzada said he wouldn’t be surprised if the Turkish central bank intervenes in the market or temporarily raises interest rates to try to shore up the currency.
SHOT IN THE ARM: Japanese technology company SoftBank Group Corp. is buying British ARM Holdings for 24.3 billion pounds ($31 billion), in a deal the British government hailed as a vote of confidence in the country following last month’s vote to leave the European Union, so-called Brexit. Investors think the deal is likely to go through. ARM’s share price was up 42.5 percent at 16.94 pounds, just below the offer price of 17 pounds a share.
THE QUOTE: Mike van Dulken, Head of Research at Accendo Markets, said the “punchy bid” suggests “there is still value in stocks after big rallies, notably those with currency benefits emanating from the fall in the British pound since the Brexit vote.
ASIA’S DAY: Hong Kong’s Hang Seng index advanced 0.7 percent to 21,803.18 and Sydney’s S&P-ASX 200 gained 0.4 percent to 5,458.50. Seoul’s Kospi was up 0.2 percent at 2,021.11 while the Shanghai Composite Index retreated 0.4 percent to 3,043.56.
ENERGY: Benchmark U.S. crude fell 46 cents to $45.49 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, declined 46 cents to $47.15 per barrel in London.
CURRENCY: The euro was up 0.2 percent at $1.1055 while the dollar spiked 0.8 percent to 105.66 yen.
