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GLOBAL MARKETS-Shares tumble on concerns over oil price, China

Published 2015-12-11, 11:24 a/m
© Reuters.  GLOBAL MARKETS-Shares tumble on concerns over oil price, China
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* U.S. share indexes down over 1 pct
* Brent crude hits 7-year low; yuan at 4-1/2-yr low
* Dollar falls vs euro; Treasury prices up on safety bid

(Updates to open of U.S. markets)
By Sam Forgione
NEW YORK, Dec 11 (Reuters) - Stock markets worldwide tumbled
on Friday as falling Brent crude oil prices to seven-year lows
and a drop in China's yuan currency stoked investor risk
aversion ahead of a widely anticipated U.S. interest rate
increase next week.
All three major U.S. indexes sank over 1 percent as crude
prices plunged on continued oversupply concerns. Indeed, the
International Energy Agency said it sees the oil glut worsening
in 2016 as demand slows and OPEC shows no signs of slowing
production.
A fall in China's yuan to its lowest in four-and-a half
years on concerns over the slowing world No. 2 economy, and
expectations of a U.S. rate hike, hurt shares worldwide.
Concerns grew that weakness in the yuan could weigh on the
global economy and on companies with strong export ties to
China.
European shares slipped to their lowest in two months.
"We have the yuan at 4-1/2 year lows and that is causing
unease in China and abroad. Last time the yuan fell like this,
it caused a jolt for markets and anyone exporting out to China,
like the auto makers and luxury brands, will feel the pain from
a weaker yuan," 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 3.45 percent at $38.36 a barrel
after hitting $38.28, its lowest level since December 2008. U.S.
crude CLc1 was down 2.18 percent at $35.96 per barrel after
hitting $35.78, its lowest since February 2009.
MSCI's all-country world equity index .MIWD00000PUS , which
tracks shares in 45 nations, was down 1.23 percent, at 394.39.
The Dow Jones industrial average .DJI was down 1.1
percent, at 17,380.59. The S&P 500 .SPX was down 1.06 percent,
at 2,030.38. The Nasdaq Composite .IXIC was off 1.15 percent,
at 4,987.34.
Europe's broad FTSEurofirst 300 index .FTEU3 was down 1.86
percent at 1,401.52.
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 0.33 percent, to 97.611.
U.S. Treasury debt prices surged as the drop in oil prices
and weakness in stocks spurred investors to seek the relative
safety of government bonds.
Benchmark 10-year U.S. Treasury notes US10YT=RR were last
up 17/32 in price to yield 2.18 percent, from a yield of 2.24
percent late Thursday.
Gold prices bounced from earlier losses. Spot gold was up
XAU= $3.07 at $1,074.21 an ounce.

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