US markets are shut on account of King Martin Luther Day
Yellow metal nose-dived today despite the turmoil in the global financial markets over the heightened concerns that US will lead a global economic slowdown. Bullion tumbled today on dollar strength against the euro and on plunge in the oil prices on continuously rising demand concerns. Though U.S. markets are shut for a holiday, stock futures declined a whopping 400 points as global indexes become unhinged.
The downbeat start to the week followed a poor performance from the U.S. on Friday, which triggered steep losses in the Asian and European markets today. Losses from financials were to blame in both cases, after U.S. bond insurers came under fire from a ratings agency last week and as a proposed economic stimulus plan from President Bush failed to generate much enthusiasm in a week of U.S. banking sector results.
MCX bullion futures are trading down around Rs 100 at 11097 per 10 grams in the late electronic session. Its international counter part is trading at $872 down nearly $10 an ounce.
Base metals also dropped very steeply hurt by the growth concerns in US and its spill over effects on the global economies.
In currencies today, Euro floundered against both the US dollar and Japanese yen. The euro tumbled following weekend remarks from a European Central Bank policymaker that further underlined expectations for slower growth across the nations that make up the single currency. Also the speculation that the Societe Generale the main European financial services companies may be forced to write down assets reflected that the US recession is having impact on Europe.
The Bank of Japan is widely expected to hold interest rates steady at 0.50% when it announces its policy decision on Tuesday. The pound fell to its lowest in nearly a year against the dollar on Monday, pressured by a spike in global risk appetite and further evidence that the UK housing market is heading for a sharp downturn.
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