World markets jittery ahead of Fed meet
December 14, 2015, 6:00 pm

With one day left before the Fed decides on interest rate hikes, world markets continue to be anxious [Xinhua]

Brazil’s real and Colombia’s peso both slid at least 0.8 per cent on fears that a rise in interest rates would lure investors back to the US.

Both currencies are down nearly 30 per cent year on year.

Brazil’s Bovespa stock exchange – already reeling from the political instability of impeachment calls against President Dilma Rousseff and Moody’s possible downgrading – fell 0.45 per cent.

It is down nearly 10 per cent year on year.

The MSCI LatAm index, which measures stock market performance in that region, is down nearly 32 per cent since December 2014.

The overall MSCI Emerging Markets index fell 19 per cent in the same period.

The MSCI world index was itself down 0.6 per cent.

In Turkey, for example, the lira currency fell to a two-month low of nearly 3 against the dollar.

The benchmark Borsa (Bourse) Istanbul dropped 0.82 per cent despite government assurances that the central bank will not be affected by a US interest rate hike.

Indonesia’s rupiah currency dropped 0.9 per cent against the dollar – the lowest in 45 days, while the stock market fell 0.4 per cent to the lowest level since July.

In Russia, markets were performing as miserably as the rest of world exchanges back in August.

The ruble fell as low as 71.28 before settling at 70.39 against the dollar Monday on fears of a major oil glut under way.

Benchmark West Texas Intermediate Crude fell even further on Monday to $35.89 a barrel while Brent crude came in at $37.55 at press time.

Russia, which is a major oil and gas exporter, is struggling with these oil prices; Moscow’s benchmark MICEX exchange fell by one per cent Monday afternoon.

Meanwhile, European stocks also slid on Fed and oil slump fears.

France’s CAC 40 fell 1.68 per cent; London’s FTSE was down 1.32 per cent and Germany’s DAX was down nearly two per cent.

The BRICS Post with inputs from Agencies