World stocks, yields drop with focus on growth, central banks
A gauge of world stocks fell on Wednesday amid new signs of concern for the global economy, while benchmark U.S. Treasury yields sank to fresh 15-month lows and German bond yields fell further below zero.
China`s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed.
The New Zealand dollar tumbled after the country`s central bank flagged a possible cut in interest rates, becoming the latest to turn dovish in the face of slowing global growth.
Meanwhile, European Central Bank President Mario Draghi said the ECB could further delay an interest rate hike and may look at measures to mitigate the side-effects of negative interest rates, warning that risks to growth were on the rise.
"You are just not seeing the strength in the economies and that’s why you have this negative interest rate scenario," said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates in Toledo, Ohio.
"It just compounds the problem of what people were thinking going into March that a lot of these global economies are slowing,” Lancz said.
Markets have been rattled since Friday, when the 3-month U.S. Treasury yield exceeded the yield on the 10-year note, an inversion of the yield curve that is widely seen as an indicator of a recession.
On Wednesday, Wall Street`s main indexes slumped anew.
The Dow Jones Industrial Average fell 144.89 points, or 0.56 percent, to 25,512.84, the S&P 500 lost 21.21 points, or 0.75 percent, to 2,797.25 and the Nasdaq Composite dropped 76.50 points, or 0.99 percent, to 7,615.03.
The pan-European STOXX 600 index rose 0.02 percent. The euro zone bank stocks index gained 1.9 percent after Reuters reported the ECB was studying options to lower the charge banks pay on some of their excess cash as a possible way to offset the side-effects of its ultra-easy policy.
However, MSCI`s gauge of stocks across the globe shed 0.54 percent.
Turkey`s main share index dropped 5.7 percent, as foreign investors in need of lira flocked to sell stocks and bonds, analysts said.
Benchmark 10-year Treasury yields slid as investors remained focused on central bank dovishness globally.
Benchmark 10-year notes last rose 10/32 in price to yield 2.3788 percent, from 2.412 percent late on Tuesday.
Germany`s long-dated borrowing costs hit 2-1/2-year lows below zero percent.
The New Zealand dollar was on pace for its worst fall in seven weeks against its U.S. counterpart, as the country`s central bank unexpectedly said its next move in interest rates was more likely to be a cut, abandoning its neutral stance at a policy review.
"RBNZ follows the Fed into dovish territory and its becoming increasingly clear that there are few central banks that want to be caught on the wrong side of the Fed," Brad Bechtel, global head of FX at Jefferies, said in a note.
The dollar index, which measures the U.S. dollar against a basket of currencies, rose 0.09 percent, with the euro down 0.04 percent to $1.126.
Oil prices sank after government data showed U.S. crude stocks unexpectedly rose last week as exports slowed due to a chemical spill along at the nation`s busiest energy port.
U.S. crude fell 1.1 percent to $59.28 per barrel and Brent was last at $67.78, down 0.28 percent on the day.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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