World shares plunge as US slowdown adds to EM woes
Wednesday, 5 February 2014 00:08
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Reuters: World shares slumped to a near four-month low on Tuesday as signs the US economy was stuttering compounded already frayed nerves following a sharp sell-off in emerging markets.
A weaker-than-expected report on U.S. factory activity hurt global equity markets and the dollar on Monday and left investors scurrying for traditional safe-haven assets such the U.S. and German government bonds and the Japanese yen.
It had been another torrid Asian session as traders returning from Lunar New Year holidays got up to pace with the sell-off and European markets looked in no mood to deviate from the downward course.
New falls on all the major bourses saw the pan-European FTSEurofirst start down 0.5%, although it was looking almost rosy compared with MSCI’s main emerging market index.
It was down another 1.4% having fallen 12% over the last two months, while MSCI’s 45 country all world index dropped to its lowest since early October.
German government bonds, considered to be one of Europe’s most secure investments, saw prices hit a 6-month high while most of the rest of the region lost ground.
The U.S. dollar was last up 0.2% at 101.16 yen staying above Monday’s low of 100.77 yen, its lowest level against the Japanese currency since November 21. The euro was at $1.3509, held back by talk the ECB could ease policy this week.
