U.S. stocks sink with emerging currencies after Fed

‘Fear Trade’

“It’s the fear trade,” said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc. “The lira gave up its gains this morning. It’s the panic that this is going to become a contagion. Guys are buying Treasuries on the back of that.”

The Stoxx Europe 600 Index slipped 0.6%.

Mulberry Group Plc slumped 27% after the British luxury-handbag maker said earnings will be “substantially below” estimates. Fiat SpA lost 4.9% after the automaker that bought full control of Chrysler last week forecast 2014 profit that trailed analysts’ estimates.

The MSCI Asia Pacific Index added 1.8% as Japanese stocks surged, while the MSCI Emerging Markets Index rose 0.3% in a second day of gains. The gauge slumped 2.3% last week, the most since November.

Mark Mobius, chairman of Templeton Emerging Markets Group, said inflows into developing nations will resume later this year following a selloff triggered by the Fed’s tapering monetary stimulus. Russian shares had their longest losing streak since April and the Borsa Istanbul 100 Index of Turkish shares slumped 2.3%.

Commodity Markets

Gold futures climbed 0.9% to settle at $1,262.20 an ounce amid demand for safe-haven investments after the Fed’s statement. West Texas Intermediate crude oil closed little changed at $97.36 a barrel.

Natural gas surged on the last day of February futures trading on speculation that a government report tomorrow will show a bigger-than-normal inventory drop as frigid weather eroded supplies. Futures jumped as much as 13% to $5.71 per million British thermal units, the highest intraday price since Jan. 26, 2010.

The S&P GSCI index of raw materials prices climbed a second day, adding 0.4% to the highest level on a closing basis this year.

www.bloomberg.com

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