World equities fall 1 percent, dollar rallies
Written on September 11, 2008
World equities dropped to their lowest level in more than two years and the U.S. dollar hit a one-year high against the euro on Thursday, as investors fretted over global growth and took refuge in safer assets.
A strong dollar and concerns that the slowing global economy would dampen demand weighed on oil and commodity prices, with U.S. crude oil falling towards $102 and gold at 11-month lows.
Markets remained under pressure a day after leading U.S. investment bank Lehman Brothers posted a $3.93 billion third quarter loss and unveiled a plan to shed weak assets.
Global growth and financial concerns have encouraged U.S. investors to keep money at home, boosting the dollar and depressing riskier assets.
“Risk aversion is still hitting the markets, and is going to be there for quite some time,” said Carlin Doyle, emerging markets strategist at State Street.
The MSCI main world equity index .MIW00000PUS fell 1.0 percent to its lowest since July 2006, and the FTSEurofirst 300 index also dropped more than 1.0 percent, led by banking shares.
U.S cash till payday. stock index futures pointed to a lower open on Wall Street, with Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) dropping 17.2 percent to $6 before the bell on broker downgrades.
The dollar hit a one-year high against the euro at $1.3894 and against an index of currencies .DXY, benefiting from broad risk aversion.
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