Global stocks, oil fall on China data, Greece
NEW YORK, May 11 — Global shares and commodity prices fell today as investors wary of political deadlock in Greece and weak economic data from China cut back on their appetite for risk.
Fears of slower economic growth and uncertainty over Europe pushed government debt prices higher, with German Bund futures hitting record highs. An unexpected fall in US producer prices helped debt prices climb.
The price of crude oil, copper and gold all fell as the euro traded flat with the US dollar.
European shares fell and Wall Street opened lower, pulled down by bank shares after JPMorgan Chase & Co disclosed after markets closed yesterday a trading loss of at least US$2 billion (RM6.1 billion) from a failed hedging strategy.
The Dow Jones industrial average was down 64.56 points, or 0.50 per cent, at 12,790.48. The Standard & Poor’s 500 Index was down 7.82 points, or 0.58 per cent, at 1,350.17. The Nasdaq Composite Index was down 10.94 points, or 0.37 per cent, at 2,922.70.
The FTSEurofirst index of top European stocks dipped 0.6 per cent to 1012.59 points, led by banking shares, which were hit by JPMorgan.
The MSCI world equity index was on course for a second weekly loss of more than 2 per cent and emerging equities were set for their biggest weekly loss since November, as investors dropped riskier assets.
German Bund futures rose as high as 143.09, up 48 ticks on the day, and Bund yields hovered near record lows of 1.50 per cent.
The benchmark 10-year US Treasury note was up 9/32 in price to yield 1.84 per cent.
The euro bounced from a 3-1/2 month low of US$1.2905, and was trading just off break-even, at 1.2929.
“Today there is a flight-to-safety — Greece is not resolved, Spain is not resolved ... and JPMorgan adds a bit of concern simply because they were assumed to be the well-run bank and if this sort of thing could happen there where else could it happen,” said Lou Brien, market strategist with DRW Trading Group in Chicago.
Crude prices fell below US$112 a barrel after a weak reading of industrial growth in China sparked worries that demand may slow from the world’s No. 2 oil consumer.
Chinese industrial output expanded at its slowest annual pace in April in nearly three years. When paired with poor trade figures yesterday, the data suggest China’s economy continues to slow after a weak first-quarter performance.
Brent crude futures for June delivery lost 87 cents to US$111.86 a barrel.
The US light sweet June contract dropped 97 cents to US$96.10 a barrel.
The US dollar index was up 0.06 per cent at 80.161, and against the Japanese yen, the dollar was down 0.08 per cent at 79.86. — Reuters