As the week culminates, commodities and shares fell on growing fears over Chinese and the Euro Zone economy and as hopes of another round of quantitative easing faded. In his testimony yesterday, the US Fed Chairman Bernanke said that the central bank is ready to act to revive the economy but provided little cues on monetary easing as was widely anticipated by the investors.
Extending losses, spot gold declined, hitting one week low of $1561.44 an ounce. However, it was seen trimming earlier losses during the afternoon trades. Spot silver dropped too. Base metals slumped in LME, with copper slipping to a six month low dropping around three per cent on mounting fears over China’s economic growth. The interest rate cut by China created fear that the economic slowdown in the country was worse than anticipated.
Markets are eying for a slew of data set to release this Saturday to get further signals. During the afternoon, though weak trend in the international market continued to build pressure to move south. Crude oil declined for the second consecutive day. In Nymex, crude oil was heading to post its biggest weekly loss in around thirteen years.
Market mood skidded after Federal Reserve Chairman Bernanke restrained from any further easing and also due to Fitch cut its rating on Span’s credit rating. Sentiments also got concave as Chinese rate cut fueled concerns over the dire state of the Chinese economy.
Looking into US session, the US trade balance is the only economic data slated for release. On the whole, market mood is likely to remain cynical in the twilight session. With elections in Greece due in almost a week’s time, markets would be hoping for a desirable outcome to rejuvenate their scruffy sentiments.
An uncanny outcome of the elections could throw up markets into a state of doldrums and periods of long liquidation. After ditching hopes of a QE3 yesterday, Federal Reserve is all set get back into limelight with the much anticipated FOMC meeting slated for 19th-20th June, with this event scheduled at the backdrop of Greece election results, financial markets could be in for a twist.