Global slowdown fears hit shares and commodities

Mon Jun 4, 2012 7:40am EDT
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By Richard Hubbard

LONDON (Reuters) - The uncertain worldwide growth outlook flushed more investors out of riskier assets on Monday, sending shares and commodities down, despite signs that a drive by Europe's leaders to tackle the region's debt crisis was gathering momentum.

The euro slid 0.2 percent to $1.2430, though it was trading well above the $1.2288 it hit on Friday, its lowest level since July 2010, while Brent crude oil fell below $97 a barrel to a 16-month low.

But safe-haven German government bond yields also rose from last week's record lows as some investors looked to take profits on the sharp moves of the past week, with low liquidity due to a UK market holiday exacerbating price swings.

"Investors are just fleeing risk assets," said ATI Asset Management chief investment officer Simon Burge.

The latest sell-off followed disappointing U.S. jobs growth figures on Friday and weak Chinese manufacturing data, which stoked fears that deepening problems in the euro zone are causing a global slowdown in business activity.

Those fears caused sharp falls across Asian markets on Monday, dragging Tokyo's Topix index .TOPX to a 28-year low, and followed a fall of more than 2 percent in U.S. stocks on Friday. U.S. stock index futures also pointed to a lower open on Wall Street on Monday .N.

The MSCI world equity index .MIWD00000PUS was down 0.5 percent at 290.58 points, and is back at levels last reached in December before a wave of coordinated central bank intervention sparked a recovery.

In thin European markets, the FTSE Eurofirst 300 .FTEU3 index of top shares was down 0.1 percent at 953.94 points after hitting a six-month low on Friday, while the blue chip EuroSTOXX 50 .STOXX50E was down 0.9 percent at 2,086.62 points.   Continued...

A currency dealer works in front of a screen showing the current Korea Composite Stock Price Index (KOSPI) (R) at a dealing room of a bank in Seoul June 4, 2012. REUTERS/Kim Hong-Ji