March 2 (Bloomberg) -- Soaring oil prices have displaced Greece’s sovereign debt as a threat to global economic growth and financial markets, HSBC Holdings Plc, Europe’s largest bank by market value, said.
“With Greece disappearing, at least temporarily, from the headlines, investors have quickly found a new source of anxiety thanks to the recent surge in oil prices,” HSBC Chief Economist Stephen King said in a note today. “If the trend persists, a fragile economic recovery in the developed world could quickly be derailed and inflation could return to emerging markets.”
Brent crude surged to as much as $128.40 a barrel yesterday, the highest since July 2008. Brent for April settlement slipped 1.2 percent to $124.67 on the London-based ICE Futures Europe exchange at 12:48 p.m. today.
Equity investors should “take insurance” by becoming overweight in energy stocks while foreign exchange investors should favor the currencies of oil-producing nations such as Norway, Malaysia, Brazil and Russia, he said.
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