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GLOBAL MARKETS-Stocks fall on global growth concerns, dollar slips

Published 2015-12-18, 01:19 p/m
© Reuters. GLOBAL MARKETS-Stocks fall on global growth concerns, dollar slips
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* Shares fall as euphoria over Fed rate hike fades
* Bond prices rise on safe-haven demand, dovish Fed view
* U.S. crude hits lowest level since 2009

(Adds close of European bond, stock markets)
By Herbert Lash
NEW YORK, Dec 18 (Reuters) - Global equity markets fell on
Friday, pulled lower by concerns about slumping crude oil prices
and whether they are a sign of slower growth, while the dollar
slipped against the yen on views the Bank of Japan may not ease
policy as much as expected.
Equity investors were cautious in the wake of the euphoria
that followed the U.S. Federal Reserve's first interest rate
hike in almost a decade earlier in the week. But trading in oil
was volatile.
The yen gained after the BoJ merely tweaked its monthly
asset-purchase program. The move put a pause in the dollar's
rise in recent months on views that the Fed's likely decision to
raise rates and the BoJ's path of more potential stimulus would
drive investment into higher-yielding U.S. assets.
"The BoJ's move shows a weak hand," said Jens Nordvig,
global head of FX strategy at Nomura in New York. "It suggests
the BoJ is out of ammunition, and will not be able to deliver
anything meaningful going forward," he said.
The dollar, which had hit a more than two-week high of
123.590 yen, fell 0.95 percent to 121.39 JPY= .
The euro rose 0.12 percent against the dollar at $1.0838
EUR= . The dollar index .DXY , which measures the greenback
against a basket of six other major currencies, fell 0.39
percent at 98.879.
Equities suffered from fatigue after markets rose in
anticipation of the Fed move, while the slumping price of oil
was driving investor sentiment on concerns over global growth
and a growing supply surplus.
"We had a couple of strong days as a result of the Fed,"
said Andrew Wilkinson, chief market strategist at Interactive
Brokers LLC in Greenwich, Connecticut.
"The market is getting sucked into a fear trade," he said.
"It's really oil - is it a glut or a global slowdown? But I
don't think it's symbolizing a slowdown in the global economy."
MSCI's all-country world stock index .MIWD00000PUS fell
1.0 percent, while the FTSEurofirst 300 index .FTEU3 of
leading European share closed down 1.05 percent at 1,419.35.
On Wall Street, the Dow Jones industrial average .DJI fell
271.01 points, or 1.55 percent, to 17,224.83. The S&P 500
.SPX slid 25.92 points, or 1.27 percent, to 2,015.97 and the
Nasdaq Composite .IXIC lost 58.65 points, or 1.17 percent, to
4,943.91.
Crude oil retreated following a rebound of almost 1 percent
after the U.S. benchmark traded well below $35 a barrel. Global
benchmark Brent crude LCOc1 fell 1.13 percent to $36.64 a
barrel, while U.S. crude futures CLc1 tumbled 1.72 percent to
$34.35 a barrel.
Prices on U.S. Treasuries rose in choppy trading on rising
investor skepticism over the Fed's ability to raise interest
rates as much as it would like next year.
The decline in crude and tumbling stock markets encouraged
investors to seek the relative safety of U.S. government debt.
The slide in oil prices suggests inflation will remain benign.
The benchmark 10-year U.S. Treasury note US10YT=RR rose
14/32 in price to yield 2.1882 percent.

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