Daily ETF Roundup: FXI Slumps On Risk Aversion, UNG Jumps On Cooler Weather

by on February 6, 2012 | ETFs Mentioned:

Stock markets kicked off the week on a fairly dismal note as Euro zone woes resurfaced over the weekend. On the home front, the Dow Jones Industrial Average and Nasdaq both lost 0.13% on the day, while the S&P 500 clawed its way back up, shedding just 0.04% as the trading session drew to a close. Rising tension overseas spilled over into the currency markets, pushing the U.S. dollar higher; likewise, gold prices encountered selling pressures and futures contracts for the precious metal lost about 1% on the day, closing near $1,720 an ounce [see also Thoughts On The New Gold Miners ETF].

The euro dropped on Monday as investors reacted to the latest delay in negotiations; investor worries intensified after Greek leaders failed to reach a unified agreement in securing a bailout package for the debt burdened nation [see ETF Insider: Will Euro Woes Rain On The Bull's Parade?]. German Chancellor Angela Merkel put pressure on Greece to accept the rather strict terms for the proposed EU/IMF bailout, however, officials were able to delay their decision for yet another day. Stephen Wood, chief market strategist for Russell Investments, commented, “We’re in the hands of the best efforts of European politicians. That’s a source of risk that’s difficult to forecast”.

The iShares FTSE China 25 Index Fund (FXI) was one of the worst performers, shedding 1.53% on the day. China equities took a bit of a hit on Monday as investors broadly decreased their risk exposure following the latest news that Greek debt negotiations had been further delayed. Investors scaled back on emerging markets exposure given the impressive bull-run from last week; despite today’s profit taking, FXI is still up an impressive 14% year-to-date [see Asia-Centric ETFdb Portfolio].

The United States Natural Gas Fund (UNG) was one of the strongest performers, gaining 2.44% on the day, bolstered by a bounce back in natural gas futures prices. Fuel prices have sunk to all-time lows over the pat few weeks thanks to an uncharacteristically warm winter and larger-than-expected stockpiles. Natural gas jumped on Monday as investors rejoiced over a considerably cooler weather forecast for the coming days; nonetheless, UNG remains in red territory, down 15% year-to-date [see UNG Returns].

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Disclosure: No positions at time of writing.