NEW YORK - Turkey`s worsening currency crisis sent world equities lower and cut into the value of emerging market stocks and currencies on Monday, while boosting the prices of German bonds and other stable assets.
The MSCI world equity index <.miwd00000pus>, which tracks shares in 47 countries, was down 0.8 percent on the day and 1.8 percent since Friday`s open as the Turkish lira plunged to a record low, forcing the country`s finance minister to announce an economic action plan to ease nerves.
The lira has tumbled on worries over President Tayyip Erdogan`s increasing control over the economy and deteriorating relations with the United States. It fell as much as 12 percent at one stage on
"The plunge in the lira, which began in May, now looks certain to push the Turkish economy into recession, and it may well trigger a banking crisis," said Andrew Kenningham, chief global economist at Capital Economics. "This would be another blow for EMs as an asset class."
Emerging market stocks lost 1.97 percent.
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"The global financial system is so interconnected that we tend to think of them as a group and financials come under pressure," said Art Hogan, chief market strategist at B. Riley FBR in New York.
The Dow Jones Industrial Average <.dji> fell 125.44 points, or 0.5 percent, to 25,187.7, the S&P 500 <.spx> lost 11.35 points, or 0.40 percent, to 2,821.93 and the Nasdaq Composite <.ixic> dropped 19.40 points, or 0.25 percent, to 7,819.71
European stocks fell on Monday, with a pan-European index of shares <.stoxx> down 0.3 percent and the banking stock index <.sx7e> as much as 2.6 percent lower.
The pan-European FTSEurofirst 300 index <.fteu3> lost 0.31 percent.
Safe-haven government bonds were in demand, with yields on German 10-year debt, the benchmark for the euro zone, dropping to a one-month low
Benchmark 10-year U.S. Treasury notes
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)