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GLOBAL MARKETS-Shares tumble amid risk aversion; oil price, China yuan drop

Published 2015-12-11, 01:56 p/m
© Reuters.  GLOBAL MARKETS-Shares tumble amid risk aversion; oil price, China yuan drop
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* U.S. share indexes down over 1.5 pct
* Wall Street set for worst weekly loss in a month
* Brent crude hits 7-year low; yuan at 4-1/2-yr low
* Dollar falls vs euro; Treasury prices up on safety bid
* U.S. 30-year yields hit over 6-wk low

(Updates to close of European markets)
By Sam Forgione
NEW YORK, Dec 11 (Reuters) - Stock markets worldwide tumbled
on Friday, Brent crude oil prices fell to seven-year lows and
China's yuan currency sank on risk aversion ahead of a widely
anticipated U.S. interest rate increase next week and worries
over economic growth.
All three major U.S. indexes sank over 1.5 percent, while
crude prices plunged amid global oversupply. The International
Energy Agency said it sees the oil glut worsening in 2016 as
demand slows and OPEC shows no signs of slowing production.
Brent crude was set for its biggest weekly percentage drop
in over a year and U.S. crude was set for its biggest percentage
decline in roughly a year.
China's yuan fell to its lowest in four-and-a half years on
concerns over a slowdown of the world's second-biggest economy
and expectations of a U.S. rate hike. Concerns grew that
weakness in the yuan could weigh on the global economy and on
companies with strong export ties to China.
"We have the yuan at 4-1/2 year lows and that is causing
unease in China and abroad," said Jasper Lawler, market analyst
at CMC, said.
In the spot market, the yuan CNY=CFXS hit 6.4564 against
the U.S. dollar, its weakest level since July 2011.
Brent crude LCOc1 was down 4.48 percent at $37.95 a barrel
after hitting $37.36, its lowest since December 2008. U.S. crude
CLc1 dropped 2.86 percent to $35.71 per barrel after hitting
$35.35, its lowest since February 2009.
On Wall Street, the three major stock indexes were on track
for their worst weekly drop in a month.
The Dow Jones industrial average .DJI was down 1.55
percent, to 17,302.09. The S&P 500 .SPX was down 1.67 percent,
at 2,018.05. The Nasdaq Composite .IXIC was off 1.85 percent,
at 4,951.92.

BOND PRICES, GOLD GAIN
European shares slipped to their lowest in two months, with
a measure of top regional shares posting its biggest weekly drop
in three and a half months. Europe's broad FTSEurofirst 300
index .FTEU3 ended 2.14 percent lower at 1,397.49.
MSCI's all-country world equity index .MIWD00000PUS , which
tracks shares in 45 nations, was down 1.44 percent at 393.61.
The dollar fell against the euro as concerns over weak
commodity prices and the yuan's slump overshadowed solid U.S.
retail sales data. Those concerns were unsupportive
of further monetary policy tightening by the Fed beyond
December's heavily anticipated rate increase.
"These external macro factors could limit the scope of Fed
hikes next year and that is weighing on the dollar," said Omer
Esiner, chief market analyst at Commonwealth Foreign Exchange in
Washington.
The dollar index .DXY , which tracks the greenback versus a
basket of six currencies, was last down 0.39 percent, to 97.557.
U.S. Treasury debt prices surged on safe-haven demand.
Benchmark 10-year U.S. Treasury notes US10YT=RR were last
up 24/32 in price to yield 2.153 percent, from a yield of 2.238
percent late Thursday. Those yields hit 2.148 percent, their
lowest in over a week, while 30-year yields hit a more than
six-week low of 2.886 percent.
Gold prices bounced from earlier losses. Spot gold XAU=
was up $4.46 at $1,075.60 an ounce.

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