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Oil, gold climb as Middle East tension escalates; stocks fall

Oil, gold climb as Middle East tension escalates; stocks fall
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First Published: Mon, Feb 21 2011. 09 24 PM IST
Updated: Mon, Feb 21 2011. 09 25 PM IST
London: Oil rose the most in three weeks and gold rallied for a sixth day surpassing $1,400 an ounce, as tension in the Middle East escalated. Stocks fell, with Eni SpA leading energy companies with operations in Libya lower.
Gold climbed 0.9% and silver added 2.1%. The Stoxx Europe 600 Index slid 0.6%, with Eni sinking the most since May.
The German 10-year bund yield declined six basis points to 3.19%, while the New Zealand dollar strengthened against all 16 major peers. US 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% 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.
Oil jumped as much as 4.2 % to $89.78 a barrel in New York, before trading at $89.34.
Brent for April settlement on the London-based ICE Futures Europe exchange climbed as much as $2.56 to $105.08 a barrel, the highest since 25 September and traded at $104.62 at 2.40 pm local time.
Gold climbed as high as $1,403.75 an ounce, and silver rose to a 30-year high of $33.4825 an ounce.
Eni, the largest foreign oil and gas producer in Libya, lost 4%, while OMV AG, central Europe’s biggest oil company, which has been in Libya since 1975, also slid 4 %. Tekfen Holding AS, a Turkish builder with projects in the North African country, lost 5.7%.
Carlsberg A/S, the Nordic region’s biggest brewer, fell 1.4 % after profit missed estimates. Merck KGaA gained 3.6% as earnings beat forecasts.
Alpha Bank SA rose 13% as the shares resumed trading following a takeover bid from National Bank of Greece SA.
The MSCI Emerging Markets Index added 0.1%, led by by commodity producers.
Russia’s Micex Index rose 1.1% and South Africa’s benchmark gauge advanced 0.7% on higher oil and precious metals. Turkey’s ISE 100 National index lost 0.9%.
Vietnam’s VN Index slumped 4%, the most since November 2009, after the government said it will raise electricity prices by a record 15.3%.
The yield on the German two-year note dropped one basis point to 1.39% after Chancellor Angela Merkel’s Christian Democratic Union lost an election in the city-state of Hamburg to the Social Democrats.
The New Zealand dollar appreciated 0.3% against the US currency on speculation Auckland-based Fonterra Cooperative Group Ltd will raise its forecast for payouts to farmers, boosting the nation’s economic recovery. The euro weakened 0.1% versus both the dollar and the yen.
Claudia Carpenter, David Merritt, Daniel Tilles and Jason Webb in London also contributed to this story.
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First Published: Mon, Feb 21 2011. 09 24 PM IST
More Topics: Markets | Oil | Gold | Commodity | Crude |