NEW YORK: World stock markets slid to three-month lows on Friday as government bonds and the dollar rose as worries intensified over the health of the euro zone’s weakest economies.
The euro plunged to its lowest level against the dollar since late May on Friday, dragged down by persistent anxiety over the state of public finance in the euro zone and after disappointing US employment figures.
The single European currency in late-day trade fell to 1.3595 dollars, its lowest reading since May 20, against 1.3726 dollars on Thursday in New York. It was later trading at 1.3613 dollars. The dollar was bolstered against both the euro and yen after a report on US payrolls showed American employers cut more jobs in January even as the unemployment rate fell.
The dollar’s strength hammered commodity prices, which had fallen sharply on Thursday. Gold and copper slid to three-month lows.
On Wall Street, the Dow Jones Industrial Average traded below the key 10,000 level during early morning and mid-day trade, while the Standard & Poor’s 500 and the Nasdaq Composite Index also were under selling pressure.
The Dow Jones industrial was down 40.05 points, or 0.40 percent, at 9,962.13, while the S&P 500 was down 4.74 points, or 0.45 percent, at 1,058.37. The Nasdaq Composite was down 0.02 points, or 0.00 percent, at 2,125.41.
Meanwhile, gold cut some losses as the mixed labor market picture suggested recovery from the deepest recession since World War Two would remain uneven.
The MSCI all-country world index fell 1.74 percent, hitting its lowest since early November. European shares fell to two-month lows, following sharp falls in Asia.
The euro broke the $1.3600 level. The single currency has been under pressure all week as widening government bond spreads highlighted concerns over the ability of some euro zone governments to pay their debts. The bond prices of heavily indebted euro zone countries, including Greece, Portugal and Spain, fell sharply. The concern over sovereign credit has also begun to knock confidence in markets beyond the euro zone.
Stocks in emerging markets have fallen sharply in the past two weeks, with a key index at a three-month low. On Friday the emerging market index was down 3.5 percent to trade at 893.98.
Britain’s top share index fell 1.53 percent. The FTSE 100 closed down 78.39 points at 5,060.92,
posting a weekly fall of 127.60 points, its fourth-straight weekly decline.
The pan-European FTSEurofirst 300 index of top shares fell 2.1 percent to 972.10 points, the lowest close since early November of last year. Over the week, the index fell 3.9 percent, its biggest weekly fall since last March. It is down 9.5 percent from the 15-month high it hit on Jan 11.
The DAX index in Frankfurt ended at 5,434.34 points, down 98.9 or 1.79 percent, a fall of 174.45 points from last Friday. The CAC-40 index in Paris closed at 3,563.76 points, down 125.49 or 3.40 percent. losing 175.70 from a week ago.
The Swiss market index closed at 6,264.33 points, down 132.18 or 2.07 percent. The index lost 176.39 over the week.
In Asia, the Nikkei average fell almost 3 percent to a two-month closing low as risk aversion rose on growing sovereign debt problems in Europe, although Toyota shares managed to find a floor despite mounting recall woes. The benchmark Nikkei shed 2.89 percent to 10,057.09, a fall of 298.89 points, after earlier falling as low as 10,036.33. Over the last seven days the index fell 140.95 points.
Stocks fell in Hong Kong. The Hang Seng Index ended down 3.33 percent, or 676.56 points at 19,665.08, its lowest since Sept. 2, 2009. During the week the index lost 456.91 points.
Indian shares dipped by over 2 per cent Friday with fresh concern over a global economic recovery.
The benchmark Sensex index of the Bombay Stock Exchange closed at 15,790.93, down 434.02 points or 2.68 percent.
The 50-share S&P CNX Nifty of the National Stock Exchange closed at 4,718.65 after losing 126.70 points or 2.61 percent.
Oil slid 4 percent to below $71 per barrel on Friday as a stronger dollar and data showing additional US job cuts as investors fled from risky assets like commodities.
It was the second straight session of steep declines, as oil prices on Thursday posted their biggest one-day fall since July.
US crude oil for March delivery fell $2.92 to $70.22 per barrel by 1:56 p.m. EST (1856 GMT) after reaching a session low of $69.50. US crude on Thursday closed down 5 percent. London ICE Brent for March fell $3.39 to $68.74.
