Global stocks fall as US govt shutdown looms

Published: December 22, 2018 11:24:52 | Updated: December 26, 2018 11:54:57

File Photo (Collected)

World stock markets continued a week-long sell-off on Friday as the threat of a US government shutdown.

MSCI’s index of global equities fell 1.5 per cent, dragged down by broad declines in Europe and Asia.

On Wall Street, US stocks initially moved higher after Commerce Department data showed the US economy is on pace to grow by 3.0 per cent this year. But they pared their gains and then turned lower.

The Dow Jones Industrial Average fell 414.23 points, or 1.81 per cent, to 22,445.37, the S&P 500 lost 50.8 points, or 2.06 per cent, to 2,416.62 and the Nasdaq Composite dropped 195.41 points, or 2.99 per cent, to 6,333.00, reports Reuters.

Oil prices, which slid just over 4.0 per cent on Thursday, tumbled to their lowest since the third quarter of 2017. US crude CLc1 fell 1.0 per cent to $45.41 a barrel, while Brent LCOc1 fell 1.5 per cent to $53.52.

Japan's Nikkei .N225 lost 1.1 per cent to close at its lowest since mid-September last year, after giving up 5.6 per cent this week.

Australian stocks slipped 0.7 per cent, hovering just above a two-year trough hit earlier in the session.

The mood change has triggered a rush out of crowded trades, including massive long positions in US equities and the dollar and short positions in Treasuries.

Lipper data on Thursday showed investors pulled nearly $34.6 billion out of stock funds in the latest week and were heading for the biggest month of net withdrawals on record.

Benchmark 10-year Treasury notes US10YT=RR last rose 2/32 in price to yield 2.783 per cent, from 2.789 per cent late on Thursday.

As recently as October, yields had been at a seven-year high of 3.261 per cent.

The dollar index rose 0.76 per cent, with the euro EUR= down 0.74 per cent to $1.1359.

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