LONDON: World stocks slid yesterday as the strength of the dollar depressed commodity prices and weak US manufacturing data reined in hopes of a speedy turnaround in the world’s largest economy.
In Europe, stock indexes fell sharply following earlier losses in Asia, with the FTSE 100 index of leading British shares closing down 115.94 points, or 2.6 percent, at 4,326.01. Germany’s DAX ended down 179.30 points, or 3.5 percent, at 4,889.94 while the CAC-40 in France dropped 106.56 points, or 3.2 percent, at 3,219.58.
In the US, the Dow Jones Industrial Average was down 204.43 points, or 2.3 percent, at 8,594.83 around midday New York time while the broader Standard & Poor’s 500 index fell 23.61 points, or 2.5 percent, to 922.60.
Investors had been expecting Wall Street to open lower but a weak Empire State manufacturing survey reinforced the sell-off.
The monthly index into manufacturing conditions around the New York region fell to minus 9.4 in June from minus 4.6 the previous month in a further sign that any economic recovery in the US will be slow and protracted.
In recent months, the fall in the dollar has gone hand in hand with rises in commodity prices, and that in turn has helped fuel a sharp rally in mining and energy stocks.
By late afternoon London time, the dollar was 1.6 percent higher against the euro, with the single European currency trading at $1.3790.
Earlier in Asia, Japan’s Nikkei 225 stock average lost 96.15 points, or 1 percent, to 10,039.67 — on Friday, the index finished above the psychologically important 10,000-point level for the first time since October 7, 2008.
And Hong Kong’s Hang Seng slipped 390.72 points, or 2.1 percent, to 18,498.96.
Oil prices tumbled below $70 yesterday on profit-taking after recent strong gains but analysts said they expected the market to rebound quickly.
New York’s main futures contract, light sweet crude for delivery in July, sank $2.11 to $69.93 a barrel.
In late afternoon London trade, Brent North Sea crude for July shed $1.70 to $69.22.