NEW YORK (Reuters) - Global equity markets fell on Tuesday after China’s market posted its worst day in five years and political turmoil hit Greece, while the U.S. S&P 500 erased losses to end mostly flat on gains in technology and energy shares.
The drop in Chinese shares hurt risk sentiment, while a fall in oil prices to levels not seen since 2009 contributed to a second straight daily loss in European stocks and suggested global economic weakness.
The yuan currency CNY= took its biggest hit against the dollar since 2008, adding to the gloom pervading emerging markets.
Greece’s equity market slumped nearly 13 percent on political unrest, while Brent crude, which has fallen more than 40 percent in the last six months, slipped to a five-year low of $65.29 a barrel on worries over a supply glut before rebounding. Oil prices have been under pressure as the dollar has strengthened and after OPEC decided against an output cut.
Brent LCOc1 settled up 65 cents, or 0.98 percent, at $66.84 a barrel. U.S. crude CLc1 settled up 77 cents, or 1.22 percent, at $63.82 a barrel.
“U.S. investors were clearly buying the weakness after the European market closed,” Robert Francello, head trader at Apex Capital in San Francisco, said of the S&P 500 erasing most of its losses. “U.S. energy stocks and small-cap stocks had gotten very oversold and were due for a bounce.”
The S&P 500 .SPX closed down just 0.02 percent at 2,059.82, while the Nasdaq Composite .IXIC closed up 0.54 percent at 4,766.47. The Dow Jones industrial average .DJI, meanwhile, closed down 0.29 percent at 17,801.2.
MSCI’s all-country world equity index .MIWD00000PUS, which tracks shares in 45 nations, was last down 0.36 percent at 420.22. The FTSEurofirst 300 index .FTEU3 closed down 2.32 percent at 1,363.13.
The dollar posted its largest one-day loss against the yen JPY= since mid-October, as investors booked profits from the greenback’s recent gains and sought the Japanese currency’s safety on the uncertainty in Greece and weak trend in oil prices.
The dollar index .DXY, which tracks the greenback versus a basket of six currencies, was last down 0.35 percent at 88.729.
The drop in oil and equity markets fueled gains in safe-haven U.S. Treasuries prices. Long-dated U.S. government bond US30YT=RR yields, which move inversely to prices, fell to their lowest in nearly two months, at 2.84 percent. The benchmark 10-year note US10YT=RR was last up 12/32 in price to yield 2.21 percent.
Gold rose nearly 3 percent and hit its highest since late October on the pullback in the dollar. U.S. gold futures GCcv1 closed up 3.1 percent at $1,232.00 an ounce.
Reporting by Sam Forgione; Additional reporting by Chuck Mikolajczak in New York; Editing by Leslie Adler and James Dalgleish