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Global Markets: Shares drop on weak Europe data, dollar extends run

Reuters  |  NEW YORK 

By Lewis Krauskopf

NEW YORK (Reuters) - Stocks around the world pulled back sharply on Thursday as fears of a global growth slowdown spread to Europe, while the U.S. dollar strengthened for a sixth session as central banks outside the country grow more cautious.

MSCI's gauge of stocks across the globe shed 0.95 percent, receding from two-month highs reached earlier in the week, as the pan-European STOXX 600 index lost 1.11 percent.

The sharply cut its forecasts for zone economic growth this year and next on expectations the bloc's largest countries will be held back by global trade tensions and domestic challenges.

Germany's DAX stock index tumbled 2.3 percent as industrial output in Europe's biggest unexpectedly fell in December for the fourth consecutive month.

"Even though we are in the midst of earnings season, the macro environment is really impacting global risk sentiment," said Katie Nixon, at in

"Fears of a more dramatic slowdown in are being joined with the fears around a slowdown in And the broad slowdown in global trade is having a direct impact on some of these economies and some of the results."

Adding to the growth jitters, said in a television interview that there was a sizable distance to go in U.S.-trade talks.

On Wall Street, the Dow Jones Industrial Average fell 246 points, or 0.97 percent, to 25,144.3, the S&P 500 lost 29.76 points, or 1.09 percent, to 2,701.85 and the Nasdaq Composite dropped 88.26 points, or 1.2 percent, to 7,287.02.

U.S. regional lender will buy rival for about $28 billion in stock, the biggest in about a decade. Shares of both banks rose.

The downgrade in European growth expectations filtered into markets, with the down 0.05 percent to $1.1354.

The dollar index, which weighs the greenback against a basket of six currencies, rose 0.03 percent, firming for a sixth session in a row.

The dollar's gains come despite the Federal Reserve's dovish shift on interest rates last week.

"When analyzing a currency's exchange rate, it should be relative to a peer. So far it seems none of these peers have a competitive advantage, making the dollar the less unloved currency," Hussein Sayed, at said in a note.

yields fell for a third straight session. Benchmark U.S. 10-year notes last rose 11/32 in price to yield 2.6644 percent, from 2.704 percent late on Wednesday.

Oil fell after data showing a rise in U.S. inventories weighed on market participants already rattled by worries over the global

U.S. crude sank 2.78 percent to $52.51 per barrel and Brent was last at $61.50, down 1.9 percent on the day.

(Additional reporting by in New York and Marc Jones in London; Editing by Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 07 2019. 21:57 IST
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