By Stephen Kirkland and Boris Korby - Feb 21, 2011 2:35 PM PT
Oil rose to the highest since September 2008 and gold rallied for a sixth day surpassing $1,400 an ounce as tension in the Middle East escalated. Stocks fell the most in a month as Eni SpA led companies with operations in Libya lower.
Brent crude gained 5.3 percent to $107.93 at 5:34 p.m. New York time. Gold climbed 1.2 percent and silver added 3.8 percent. The Stoxx Europe 600 Index declined 1.3 percent, with Eni sinking the most since July 2009. Standard & Poor’s 500 Index futures lost 0.9 percent. Bahrain’s 2020 bond yield increased for a 10th day after S&P cut the nation’s debt rating. The yen and the dollar strengthened against most of their major peers. U.S. markets were closed for the Presidents’ Day holiday.
Libyan security forces attacked anti-government protesters as demonstrations spread across the Middle East and North Africa, a region that accounts for 36 percent of global crude output. Chinese authorities blocked foreign news reports on protests across the country to stamp out any movement toward pro-democracy revolts.
“You’ve got to be very concerned, particularly because it can affect the oil price, and if you have the oil price spike up another $20, $30, you could reenter a global recession,” Bill Belchere, global chief economist at Mirae Asset Securities, said in a Bloomberg Television interview in Hong Kong.
West Texas Intermediate oil for April delivery jumped 6.3 percent to $95.39 a barrel in New York. Gold climbed to as high as $1,408.45 an ounce, and last traded at $1,406.45. The six days of gains is the longest streak since August. Silver rose to a 30-year high of $33.8925 an ounce.
Eni, the largest foreign oil and gas producer in Libya, lost 5.1 percent, while OMV AG, central Europe’s biggest oil company, which has been in Libya since 1975, slid 4.2 percent. Tekfen Holding AS tumbled 7.9 percent as the Turkish builder suspended work on a Libyan project, saying its priority now is the safe evacuation of 1,197 non-Libyan employees.
Merck KGaA gained 4.5 percent as earnings beat forecasts. Alpha Bank SA rose 5 percent as the shares resumed trading following a takeover bid from National Bank of Greece SA.
The MSCI Emerging Markets Index slid 0.1 percent. Benchmark indexes in Russia and South Africa rose at least 0.9 percent while gauges in Turkey, Dubai and Morocco sank more than 1 percent. Brazil’s Bovespa fell 1.2 percent.
Facing Civil War
Muammar Qaddafi’s son called on protesters to engage in dialogue or face a civil war, as violence escalated amid reports protesters seized control of Libya’s second-biggest city. Violence has flared in Yemen, Djibouti, Iran and Bahrain as governments sought to crack down on demands for change.
Bahrain’s dollar bond due 2020 fell as S&P cut its rating and signaled further downgrades were possible, saying it expected protests to persist.
Default swaps on Dubai jumped 11 basis points to 448, contracts on Qatar increased seven basis points to 113, and those for Saudi Arabia climbed five basis points to 144, according to CMA.
India’s Sensitive Index climbed 1.3 percent on gains by oil shares and Wipro Ltd.’s biggest rally since November after Credit Suisse Group AG recommended the software services provider. Vietnam’s VN Index slumped 4 percent, the most since November 2009, after the government said it will raise electricity prices by a record 15.3 percent.
The yield on Germany’s 10-year bund slid seven basis points to 3.18 percent after Chancellor Angela Merkel’s Christian Democratic Union lost an election in the city-state of Hamburg to the Social Democrats.
The yen strengthened 0.1 percent.