Stocks, bond yields slip as Ukraine crisis deepens

Thu Aug 28, 2014 5:01pm EDT
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By Richard Leong

NEW YORK (Reuters) - Stock markets around the world fell on Thursday after Ukraine said Russia had moved more troops into the country, deepening the regional crisis, as nervous investors shifted money into gold and U.S. and German government bonds.

The euro hit a 21-month low against the Swiss franc and fell against the yen as worries about intensified fighting between the Ukrainian military and pro-Russian separatists in eastern Ukraine drove investors to seek safe-haven currencies.

Ukrainian President Petro Poroshenko said Russian forces had entered Ukraine, and he convened his security and defense council to decide how to respond. Russia's defense ministry denied that Moscow had dispatched troops into Ukraine.

"Geopolitics is driving the market again, and this latest escalation in Ukraine comes as European stocks were ripe for a pull-back," said Alexandre Baradez, chief market analyst at IG France in Paris.

The tensions dragged down European equities and share prices in other markets, with the S&P 500 index .SPX retreating below the 2,000 threshold following a record close on Wednesday.

The Dow Jones industrial average .DJI closed down 41.35 points, or 0.24 percent, at 17,080.66, the S&P 500 .SPX ended 3.25 points, or 0.16 percent lower, at 1,996.87 and the Nasdaq Composite .IXIC finished down 11.93 points, or 0.26 percent, at 4,557.70. [.N]

The pan-European FTSEurofirst 300 index .FTEU3 snapped its three-day winning streak, closing 0.6 percent lower at 1,369.33 points. Tokyo's Nikkei .N225 ended down 0.5 percent at 15,459.86.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 nations, fell 1.56 points, or 0.36 percent, to 430.69.   Continued...

The London Stock Exchange is seen during ther morning rush hour in the City of London April 11, 2011.   REUTERS/Toby Melville