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WorldPosted at: Jun 16 2016 2:01PM


European stocks, oil slide as growth fears add to Brexit pressure

By Vikram Subhedar
LONDON, Jun 16 (Reuters) European stocks fell while oil prices headed for a sixth session of declines on Thursday after the Bank of Japan refrained from taking further stimulus steps, hours after the Federal Reserve struck a cautious note on its policy outlook.Sterling hit a 2-month low against the euro underscoring worries that Britain, the world's fifth-largest economy, could quit the EU after June's 23 referendum.Concerns over Brexit have dominated markets this week and in combination with dimmed expectations on global growth have driven investors towards safe-haven assets such as German bunds and gold and out of oil and stocks.Brent crude prices, which last week hit their highest this year, have fallen every day after June 8 and are now down 8 percent since."The market is going to be soft until next week. The fear is that if the British actually decide to leave the EU there may be some sort of contagion," said Avtar Sandu, senior commodities manager at Phillip Futures in Singapore."The rules for exit from the EU are not very clear. There are a lot of question marks over the economic consequences," he said.Germany's 10-year bond yield fell to a new record low as fading expectations for U.S. rate hikes this year provided further fuel to a global bond market rally.Spot gold climbed 1.4 percent and is close to hitting a two-year high.Earlier in the day Asian markets were firmly in "risk-off" mode, with the yen surging to a 20-year high against the US dollar and the Nikkei down more than 3 percent. Hong Kong's Hang Seng index is down 2 percent.Benchmark equity indices across Europe followed suit with Italy's FTSE MIB down about one percent. The pan-European FTSEurofirst 300 fell 0.9 percent.Shares of European banks, the worst performing sector this year, were on the backfoot again.Shares of UBS and Credit Suisse fell more than a percent after the Swiss National bank warned that both banks will likely each need to raise an extra 10 billion Swiss francs to meet new leverage requirements.Deutsche Bank shares, down 2.5 percent, hit a record low earlier in the day.
REUTERS SZ PR1400
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Tags: #European stocks# oil slide as growth fears add to Brexit pressure
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