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Stocks fell around the world and industrial metals declined as the US government shutdown entered a second day and a report showed employers added fewer jobs than forecast last month. The yen strengthened and Treasuries rose.
The MSCI All-Country World Index dropped 0.2 per cent to 384.02 at 8:53 am in New York. Standard & Poor's 500 Index (SPA) futures slid 0.8 percent. Zinc fell 0.6 per cent and aluminum slipped 0.3 per cent. The 10-year Treasury yield retreated four basis points to 2.61 per cent. Japan's currency rose against its 16 major peers. The euro advanced 0.4 per cent versus the dollar after European Central Bank President Mario Draghi said the bank is attentive to exchange-rate developments. Italian notes gained as Silvio Berlusconi said he'll back Prime Minister Enrico Letta's government.
Day one of the first shutdown since 1996 ended with no talks scheduled between the White House and Congress, and Treasury Secretary Jacob J Lew said the US has begun final extraordinary measures that will be exhausted no later than October 17 to avoid breaching its debt limit. The ECB kept its refinancing rate at 0.5 per cent, matching economists' estimates in a Bloomberg survey.
"Near-term risk aversion could spark a temporary pullback," Russ Koesterich, the chief investment strategist at New York-based BlackRock Inc, said in an e-mailed statement.
His company manages $3.9 trillion of assets. "The battle over debt ceiling is a more important issue and a more significant potential risk. Investors should expect more volatility in the near term."
Tesco Slides
The Stoxx Europe 600 Index fell 0.7 percent for the third decline in four days. Retailers retreated as Tesco Plc, the U.K.'s largest supermarket chain, sank 3.1 percent after first-half earnings declined. Portugal Telecom SGPS SA surged 14 percent as the phone company agreed to combine with Brazil's Oi SA.
The decline in S&P 500 futures signaled U.S. stocks will pare yesterday's 0.8 percent gain. Companies increased payrolls by 166,000 in September, figures from ADP Research Institute showed today. The median forecast of 40 economists surveyed by Bloomberg called for an advance of 180,000.
The MSCI Emerging Markets Index was little changed. The Philippine Composite Index jumped 2.7 percent after the Asian Development Bank raised its economic growth forecast for the country. Benchmark gauges in Russia, Turkey and Hungary fell at least 0.6 percent. Markets in India and China were shut for holidays.
