Global shares fall on economy fears
Profit-taking on the dollar drove up the euro after it hit near two-week lows, ahead of Thursday's deadline for Greece to complete a bond swap with private creditors as part of a deal to secure a 130 billion euro (RM519 billion) bailout and avoid a messy default.
Wall Street stocks followed declines in European and Asian stock markets, and a measure of equities' performance in emerging markets fell more than 1.0 per cent.
Investors shrugged off data showing the massive US services sector expanded in February at its fastest pace in a year. The Institute for Supply Management said its services index rose to 57.3 from 56.8 in January, besting economists' expectations of a drop to 56.1.
"With China reducing the expected growth rate, the concern is there is the possibility of a bigger downside," said Kate Warne, investment strategist at Edward Jones in St. Louis.
The Dow Jones industrial average .DJI closed down 14.76 points, or 0.11 per cent, at 12,962.81. The Standard & Poor's 500 Index .SPX fell 5.30 points, or 0.39 per cent, at 1,364.33. The Nasdaq Composite Index .IXIC slid 25.71 points, or 0.86 per cent, at 2,950.48.
The FTSEurofirst 300 .FTEU3 index of top European shares fell 0.6 per cent to close at 1,080.54.
Basic resources stocks .SXPP in Europe were the top decliners, shedding 3.5 per cent after China, the world's largest consumer of raw materials, cut its annual growth target to an eight-year low.
Similarly in New York, materials shares were the biggest drags. The S&P materials sector index .GSPM fell 1.6 per cent, with aluminium producer Alcoa Inc (AA.N), a leading component, off 3.6 per cent to $9.87. Only two of the index's 29 components rose.
MSCI's all-country world equity index .MIWD00000PUS fell 0.6 per cent to 329.76. Its emerging market index .MSCIEF slid 1.4 per cent to 1,065.03.
A downward revision to euro zone surveys of purchasing managers' assessments for February wiped out much of the positive effects of last week's European Central Bank injection of three-year funding to the banks.
The euro edged back from a two-week low on profit-taking in the dollar.
"European data this morning was negative for the euro, but a lot of investors are quite short the euro, so we are starting to see some capitulation and selling on those positions," said Charles St-Arnaud, foreign exchange strategist at Nomura Securities in New York.
"I would not read too much into the euro's bounce as there are plenty of headwinds this week," he said.
The euro was slightly higher, up about 0.2 per cent to US$1.3218 (RM3.9924), after earlier falling to near a two-week low around US$1.3172 (RM3.9786).
Brent crude oil rebounded a tad after retreating from early highs to fall below US$124 (RM375) a barrel on the prospect of slower global demand after China cut its growth target and Iraq said it had raised its oil production to a 30-year high.
The potential for supply disruptions due to Iran's row with the West over Tehran's nuclear ambitions continued to bolster oil prices as US President Barack Obama met Israeli Prime Minister Benjamin Netanyahu in Washington, hoping to convince Israel to give sanctions against Iran more time.
"The geopolitical risk factor is putting a floor under (the price)," said Michael Hewson, senior market analyst at CMC.
Brent crude oil futures for April settled up 15 cents at US$123.80 (RM374)a barrel. In New York, April crude settled up 2 cents at US$106.72 (RM322.35) a barrel.
US Treasury debt prices eased as recent evidence the US economic recovery is picking up steam undermined the safe-haven value of government debt.
Losses were limited, however, and yields remained well within recent ranges as the poor euro zone data and concerns about Greece's debt swap, along with China's reduced growth target, supported demand for lower-risk assets.
Benchmark 10-year Treasury notes were trading 8/32 lower in price to yield 2.01 per cent.
Spot gold prices fell $6.83 (RM20.63) to US$1,705.00 (RM5150)an ounce.
US gold futures for April delivery settled down US$5.90 (RM17.82) an ounce at US$1,703.90 (RM5147). — Reuters