New York: World stocks fell to six-week lows on Monday on concerns about the economic consequences from Japan’s devastating earthquake and tsunami and as officials grappled with a nuclear crisis.
Oil prices zigzagged on supply concerns due to the growing unrest in a Yemeni area bordering Saudi Arabia, the world’s largest oil exporter, and as investors weighed the effects of the Japan crisis.
Gold recovered some of last week’s losses as the Japanese situation added to upward pressure on the metal, driving prices towards recent record highs.
Japanese stocks posted their biggest daily decline since October 2008 in heavy volume. The benchmark Nikkei index closed off 6.2% and the broader Topix index slumped 7.5%.
Emerging market equities were lifted by construction and refinery shares on expectations of large-scale reconstruction efforts in Japan, hit by the triple blow of earthquake, tsunami and nuclear emergency—what officials called the country’s biggest crisis since World War II.
European and US stocks tumbled on fears that Japan’s crisis could derail a global recovery.
“The earthquake could have great implications on the global economic front,” said Andre Bakhos, director of market analytics at Lek Securities Corp. in New York. “If you shut down Japan, there could be a global recession.”
The MSCI world equity index fell 0.8% to levels last seen in late January. The Thomson Reuters global stock index took off 1%. The FTSEurofirst 300 index dropped 0.7%, while emerging markets stocks rose 0.6%. The Dow Jones industrial average fell 53.70 points, or 0.45%, at 11,990.70.
The Standard and Poor’s 500 Index lost 6.59 points, or 0.51%, at 1,297.69. The Nasdaq Composite Index was down 9.15 points, or 0.34%, at 2,706.46. The iShares MSCI Japan index exchange-traded fund tumbled 7.3%, and the Global X Uranium ETF dropped 17.3%.
The US dollar rebounded from near-record lows against the yen after the Bank of Japan announced a series of policy easing measures to shore up the economy.
The dollar index, a gauge of the greenback against a basket of currencies, fell 0.4%.
The euro was up 0.3% at $1.3948 after the European Union policymakers surprised markets over the weekend by reaching significant agreements ahead of the March 24-25 heads of state meeting.
Spot gold was bid at $1,427.51 an ounce at 1212 GMT against $1,417.70 late in New York on Friday, within sight of the record $1,444.40 it hit last week.