Stocks Rise In Global Markets After Osama's Killing

Sydney, May 2 :  The dollar rebounded from three-year lows and U.S. crude slid more than 1 percent on Monday on the back of news that a U.S.-led operation killed Osama bin Laden in  Pakistan
stocks rise in global markets after osama s...
PTI 02 May 2011, 10:39 AM IST

Sydney, May 2 :  The dollar rebounded from three-year lows and U.S. crude slid more than 1 percent on Monday on the back of news that a U.S.-led operation killed Osama bin Laden in  Pakistan

U.S. Treasury yields rose across the curve after U.S. officials said the body of Al Queda's elusive leader has been recovered by U.S. authorities. 

"By lowering national security risks overall, this is likely to bolster equity markets and lower US Treasury prices in a reverse flight to quality movement," said Mohamed El-Erian, Chief Executive Officer and Co-Chief Investment Officer at PIMCO, which oversees $1.2 trillion assets.

"Oil markets are likely to be the most volatile given their higher sensitivity to the tug of war between lower risk overall and the possibility of isolated disturbances in some parts of the Middle East and central Asia," he said.

U.S. crude fell 1.3 percent to $112.39, while U.S. stock index futures rose 0.9 percent.

U.S. Treasuries fell, pushing yields higher across the curve. The 10-year yield climbed 2.4 basis points to 3.314 percent.

Earlier, a 10 percent slide in silver highlighted worries that other overbought assets may be vulnerable to sudden sell-offs.

Financial markets in China, Hong Kong, Singapore, Malaysia and Thailand were all shut on Monday for public holidays, a factor seen contributing to thin trading conditions that could exaggerate price action.

Japan's Nikkei average rose 1.0 percent, South Korea's KOSPI put on 0.9 percent, but Australia's S&P/ASX 200 index slipped 0.5 percent.

Silver skidded about 10 percent to a low of $42.58 , well off a record high of $49.51 set on Thursday. Gold fell to $1,546 from an all-time high of $1,575.79.

"If adjustment is confined to just silver, it won't be a big deal," said Koji Fukaya, chief strategist at Credit Suisse in Tokyo.

"But if this moves spills over to other commodities, that could certainly hurt commodity currencies, such as the Australian dollar and the Canadian dollar. And we could see a rebound in the U.S. dollar."

 
   
 

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