US, global stock markets weak ahead of Fed meeting

Asian stock markets mostly lower Tuesday tracking Wall Street’s decline, as jittery investors awaited the U.S. Federal Reserve’s decision on interest rates and Britain’s vote on European Union membership.

Banking stocks suffered the fallout from low yields. (AXP), off 1.7%, and Home Depot Inc.

In Tokyo, the pound was at $1.4187, trading at its lowest levels since mid-April, and down from $1.4245 in NY. The Standard & Poor’s 500 index fell 17.01 points, or 0.8 per cent, to 2,079.06 and the Nasdaq composite fell 46.11 points, or 0.9 per cent, to 4,848.44.

While traders have discounted a hike this month, they will parse Fed Chair Janet Yellen’s speech at a conference on Wednesday for clues on the health of the economy and the timing of the next hike.

United Kingdom house price growth has slowed in the run-up to the European Union referendum over uncertainty surrounding a possible Brexit vote as buyers hold-off to see how the market reacts.

“If the United Kingdom stays in the European Union then the there is very limited upside for stocks, because essentially it’s just a status quo”.

Bookmakers’ odds on a “Remain” vote have fallen from 78 percent last week to just 55 percent on Tuesday and William Hill said a Brexit could be odds-on favourite by the weekend.

The VIX has jumped more than 50% over the past month to above 22, a level last seen in February.

In a further sign of the sense of panic, the yield on German 10-year sovereign bonds – or bunds – which are considered ultra-safe investments, fell into negative territory for the first time in history. Crude oil futures fell in early Asian trade on Tuesday, as investors ignored signs of market tightness to focus on concerns over global growth and declines in stocks on the U.K.’s impending vote on European Union membership, Reuters reported.

Brent crude oil futures fell 69c to $49.66 a barrel by 8.42am GMT, dropping for a fourth day in a row, while USA crude futures lost 77c to $48.11 a barrel.

While a weaker sterling can benefit the FTSE’s worldwide companies, it could also impact domestic consumer confidence in Britain. Fed Chairwoman Janet Yellen will hold a news conference (http://www.marketwatch.com/story/yellen-may-try-to-sound-like-a-hawk-in-her-press-conference-2016-06-13) 30 minutes after the Fed’s updated economic reports.

Wholesale gasoline futures fell 1 cent to $1.52 a gallon, heating old fell 1 cent to $1.50 a gallon and natural gas rose 2 cents to $2.604 per thousand cubic feet.

Sterling has had a choppy start to the week and fell to a two-month low against the dollar on Monday.

In a campaign event at TUC headquarters attended by the shadow cabinet and leading trade unionists, Jeremy Corbyn – who has been criticised for lacklustre campaigning – will acknowledge that time is running out for Remain. Shares of Yahoo! Inc.

There is also growing talk among market participants of the role the Bank of England and other central banks may play on the night of the Brexit vote.

The pan-European STOXX 600 (^STOXX) closed the day down 1.89 percent.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity surged Rs 140 each to Rs 29,800 and Rs 29,650 per ten grams, respectively.