World shares slip on growth worries

NEW YORK: A gauge of global equities fell yesterday, weighed by sharp drops in Chinese shares, but stocks in Europe and the United States held near multi-year or historic highs as slight declines attracted buyers.
China’s plans for tighter controls on its property sector added to concern about slower global growth and dragged stocks lower, while fresh assurances of global central bank stimulus gave stocks support.
The euro retreated after last week’s soft manufacturing data increased expectations the European Central Bank could cut interest rates to boost the region’s economy.
On Sunday, China reported that its services sector expanded in February at the slowest pace in five months, and factory growth also cooled to multi-month lows. The government could also increase down-payments and loan rates for buyers of second homes in cities where prices are rising too quickly.
Stocks on Wall Street faced technical resistance as they hover near historic highs. The S&P and Dow are up more than 6 percent and 7 percent, respectively, so far this year.
“We are hitting a bit of technical resistance here, but the momentum is still there and the market is still seen undervalued. It could be anything that pushes the market above this level soon,” said Robert Pavlik, chief market strategist at Banyan Partners LLC.
Stocks got support from Janet Yellen, the Federal Reserve’s influential vice chair, who said the US central bank’s aggressive monetary stimulus is warranted given how far the economy was operating below its full potential.
The Dow Jones Industrial Average fell 24.29 points or 0.17 percent, to 14,065.37, the S&P 500 lost 1.6 points or 0.11 percent, to 1,516.6 and the Nasdaq Composite dropped 3.84 points or 0.12 percent, to 3,165.9.
The large decline in Chinese stocks sent MSCI’s world equity index down around 0.2 percent. European shares closed down 0.02 percent at 1,168.36 after a 2.1 percent fall in mining stocks, which are highly exposed to change in the growth outlook.
A lack of progress in talks to form a new Italian government after last week’s inconclusive elections weighed most on the country’s stocks, down 0.85 percent, while 10-year bond yields rose to 4.879 percent after hitting more than 5 percent earlier in the session.
Analysts said yields could have climbed higher but for the European Central Bank’s promise to support struggling nations but there remained doubts over how this could be implemented without a government able to enact tough reforms.
Rising expectations that euro zone economic worries could prompt the ECB to cut interest rates sooner than previously anticipated weighed on the euro.
The euro zone common currency was down 0.2 percent at around $1.2997, just above Friday’s 11-week low of $ 1.2966.
The 10-year US Treasury note fell 8/32 in price to yield 1.8703 percent, after hitting a fresh six-week low of 1.827.