World markets await US budget talks outcome

World markets are poised for good or bad news from the US fiscal cliff negotiations in Washington DC, where politicians are working through the weekend to avoid budget cuts and higher taxes.

On Friday, Wall Street opted to believe a last-minute deal was not likely, sending the Dow Jones Industrial Average tumbling 158.20 points, or 1.2%, to 12,938.11, capping a five-day slide that has shaved 374 points off the index and pushed it to the lowest level in a month.

The Dow, which hit a two-month high as recently as last Tuesday, is now in negative territory for December, traditionally one of the strongest months of the year for stocks.

The declines were broad-based. All 10 sectors of the S&P 500 index, and all 30 Dow components, declined. More than 95% of the S&P 500 stocks dropped.

The S&P 500 was down 1.0% to 1402.43 and the Nasdaq Composite was down 1.1% to 2960.31.

However, trading volumes were thin, which can amplify moves down or up. Just 2.4 billion shares changed hands in New York Stock Exchange composite trading—compared with 2012's daily average of 3.6 billion shares and making it the third-lowest full-day volume in 2012.

The impasse has had a positive effect on the US dollar, which on Friday hit its highest level against other currencies in more than two weeks.

The Wall Street Journal Dollar Index, which tracks the US dollar against a basket of currencies, was trading at 70.34, its highest level since December 10. Delays in US budget talks typically support the dollar and yen because of the currencies' high liquidity and safe-haven status.

In commodities, oil futures slipped under $US91 a barrel, as US inventories shrank less than expected.

Futures for February delivery settled down 7USc at $US90.80 a barrel in New York in light trading.

The February contract for gold rose $US3, or 0.2%, to settle at $US1663.70 an ounce but was down 3% for the month.

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7977 0.0012 0.15%
AUD 0.9075 -0.0005 -0.06%
EUR 0.6268 0.0003 0.05%
GBP 0.4948 0.0005 0.10%
HKD 6.1875 0.0094 0.15%
JPY 85.2720 0.0330 0.04%

Commods

Commodity Price Change Time
Gold Index 1248.5 4.340 2014-10-21T00:
Oil Brent 86.2 0.820 2014-10-21T00:
Oil Nymex 82.5 -0.260 2014-10-21T00:
Silver Index 17.5 0.190 2014-10-21T00:

Indices

Symbol Open High Last %
NZX 50 5233.1 5284.3 5233.1 0.89%
NASDAQ 4359.2 4419.5 4316.1 2.40%
DAX 8934.5 8957.2 8887.0 0.52%
DJI 16406.0 16620.8 16399.7 1.31%
FTSE 6372.3 6382.5 6372.3 -0.18%
HKSE 23300.5 23460.8 23088.6 1.17%
NI225 15038.2 15195.8 14804.3 2.64%