European equities rose while Japanese stocks led shares in Asia lower as persistent concern over market volatility helped strengthen the yen. Oil climbed back above $28 a barrel before an update on U.S. stockpiles.
The Stoxx Europe 600 Index snapped a seven-day decline while Japan’s Topix index slid to its lowest since October 2014 as a gauge of the nation’s equity volatility soared. The Straits Times Index in Singapore sank the most in three weeks while the yen strengthened a third day and gold resumed its advance.
U.S. index futures erased gains as Vermont Senator Bernie Sanders defeated Hillary Clinton in the New Hampshire Democratic Primary, while Donald Trump prevailed over a crowded Republican field.
With equity markets reeling amid concern over the creditworthiness of European banks and the impact of oil’s decline, investors will be firmly focused on Federal Reserve Chair Janet Yellen Wednesday, as she testifies before the U.S. Congress.
After the Bank of Japan’s surprise move into negative interest rates largely failed to assuage market jitters, she will need to calibrate her commentary carefully to avoid further fueling volatility.
Russ Koesterich, global chief investment strategist for New York-based BlackRock Inc., told Bloomberg TV. “People are getting worried about the global recession, worried about growth, which is affecting not only oil and stocks but other risky assets as well.”
Treasuries are off to their best start to a year since 1988 amid demand for safe investments, and gold is near a seven-month high. While markets in Singapore and Malaysia returned from Lunar New Year holidays Wednesday, mainland China, Hong Kong, Taiwan, South Korea and Vietnam remained closed.
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