Global Markets Down as Equities Selloff Continues

The selloff in global equities continued apace Tuesday as stocks in Japan slumped over 5% and markets in Europe and the U.S. extended their declines.

The Stoxx Europe 600 was down 0.8% in early trade, after falling 3.5% in the previous session.

The pressure on European banks resumed taking losses to the year to 25% and sending Greece's main stock index to its lowest level in over 20 years.

Mining shares also dropped after the chief executive of Anglo American PLC flagged a tough year ahead for commodities markets.

U.S. futures markets pointed to a 0.5% opening loss for the S&P 500. Changes in futures aren't necessarily reflected in market moves after the opening bell.

While analysts said there was no specific trigger for the selloff this week, investors pointed to a range of factors that have weighed on markets from the beginning of the year. These include worsening expectations for global growth, plummeting oil prices and uncertainty over whether the world's central banks can offer the support they once did.

"For years, the market was grinding higher at a fast pace while economic momentum was not accelerating, and this is [now] unraveling fast," said Jean Medecin, member of the investment committee at Carmignac.

Now, "tightening liquidity [from a loss of central bank support] is meeting scarce growth," he said. Mr. Medecin has sharply reduced holdings in global equities in the last year and favors ultrasafe U.S. Treasury bonds.

Stocks in Asia fell to their lowest levels since 2014 on Tuesday, as fears about the world economy rippled through markets.

Japan's Nikkei Stock Average closed down 5.4%.

The safe haven yen hit its highest level again against the dollar in over a year and Japanese government bond yields hit record lows. A rising yen makes Japanese exports less competitive and reduces the value of repatriated profits.

Japanese Finance Minister Taro Aso said the yen's movement was clearly "rough" and that he would continue to watch the currency closely.

The dollar was last down 0.3% against the yen at ¥ 115.2620.

Stocks in Australia fell 2.9%, while other Asian markets were closed for the Lunar New Year holiday.

The moves followed a rocky session on Wall Street, with major banks closing down 4% or more.

In bonds, the yield on the benchmark 10-year Japanese government bond dropped into negative territory for the first time as investors fled to safety. U.S. Treasury yields and German government bond yields were roughly flat after falling on Monday. Yields move inversely to prices.

In commodities, Brent crude oil was up 1.7% at $33.44 a barrel. Spot gold in London was down 0.4% at $1186.63 an ounce, but remained near its highest level since June.

Elsewhere in currencies, the euro was flat against the dollar at $1.1185.

Write to Riva Gold at [e-mail]

(END) Dow Jones Newswires

February 09, 2016 04:45 ET (09:45 GMT)

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