SHARED PAIN
The prospect of more ECB easing pushed down euro money market rates and buoyed demand for euro zone government bonds which become more attractive the lower borrowing costs go.
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For the region’s shares .FTEU3, however, it was only pain. Britain’s FTSE 100 .FTSE and France’s CAC 40 .FCHI were down 1.5 and 1.6 percent respectively, while Germany’s DAX .GDAXI was nursing falls of 2 percent as weaker than expected retail sales and pressure on Deutsche Bank added extra gloom.
For MSCI’s 45-country, all-world index .MIWD00000PUS it was its biggest monthly drop in almost two years having seen more than a trillion dollars wiped off its value this week.
The sell-off has been fed by emerging markets where political factors in countries such as Turkey, South Africa and Argentina have amplified worries about global economic imbalances and the end of cheap global central bank money.
Data from Boston-based fund tracker EPFR Global showed investors yanked $9 billion from emerging stock and bond funds this week, with equities seeing their biggest outflow in 2-1/2 years.
The grab for safer assets meant the dollar .DXY had the upper hand in the currency market while on the commodities front, spot gold edged up $1,250 an ounce, though it was set to snap a 5-week run of weekly gains.
Brent oil and U.S. crude dipped to $106.78 and $97.43 a barrel respectively while growth-attuned metal copper drifted toward a 4 percent monthly fall.
“The absence of the Chinese market for the next week means that we may see some further downside on commodities, especially if we do see the dollar gaining ground,” said Tim Radford, of Sydney-based metals adviser Rivkin. The market is closed for the Chinese New Year holiday.
(Additional reporting Sujata Rao in London; Editing by Janet Lawrence)
Article Appeared @http://www.reuters.com/article/2014/01/31/us-markets-global-idUSBRE96S00E20140131