World Stocks Slide; Gold, Copper, Oil Fall

Nichole Harper
12 Nov, 2010
New York City

World stocks closed declined after resource stocks fell, commodities fell to 18-month low after China reported accelerating inflation. China region indexes plunged more than 5%. Peripheral EU nations

[R]4:05 PM New York – World stocks closed declined after resource stocks fell, commodities fell to 18-month low after China reported accelerating inflation. China region indexes plunged more than 5%. Peripheral EU nations’ sovereign debt face renewed pressure on the rising budget deficits.[/R]

U.S. stocks traded lower after markets in Asia plunged and European indexes traded lower. The Nasdaq index fell the most with a loss of 1.4% and the Dow declined 0.9% and the S&P 500 dropped 1.2%.

Commodities dropped to 18-month low after inflation accelerated in China in October and prompted renewed fears that a new round of rate hikes may be in the works to cool inflation.

G20 nations meeting failed to produce clear guidelines to set right or tackle rising global financial and trade imbalances. J.C. Penney reported better higher profit.

G20 nations issued a statement after a meeting of two days that focused on broad issues of global imbalances and failed to show any concrete plans. The leaders deferred to the concrete steps to the next meeting and said the importance of common indicators to track measures that can highlight the changes in the global flows.

European indexes fell as the leaders in the region discuss renewed threat of sovereign bonds stresses in Ireland and Portugal. Resource stocks also fell on the worries that accelerating inflation in China will bring additional tightening in the world’s fastest growing economy. Richemont SA jumped 4% after it reported higher net.

UK stocks closed lower on a weakness in resource stocks. Copper prices declined from the record after China reported accelerating inflation. European leaders discuss renewed threat of sovereign debt stress in the region.

Stocks in Tokyo declined after rising for two days and banks declined. Sumitomo Mitsui Financial and Mizuho Financial revised annual earnings outlook. Mizuho also agreed to take 2% stake in the U.S. based asset manager BlackRock.

Stocks in China plunged on the worries that accelerating inflation will spark another round of bank tightening. The benchmark indexes in Shanghai plunged more than 5%. Hong Kong reported third quarter economic growth at 6.8%.

Stock in Mumbai dropped sharply tracking the losses in Asia. The benchmark Sensex index fell more than 2% as inflation hovered near recent highs. Markets in Australia declined 0.8% on the decline in commodities prices.

Commodities, Currencies and Yields

Dollar edged fall against euro to $1.37 and rose against the Japanese yen to 82.41. One UK pound fetched $1.615.

Crude oil decreased $2.90 to $84.91 a barrel for a front month contract, natural gas edged lower 12.1 cent to $3.83 per mBtu and gasoline decreased 2.65 cents to 220.92 cents.

Gold decreased $36.20 in New York trading to close at $1,367.10 per ounce, silver decreased $1.29 to $26.11 per ounce and copper for the front month delivery increased 12.05 cents to $3.90 per pound.

Yield on 10-year U.S. bond increased to 2.76% and on 30-year U.S. bond yield fell to 4.26%.