World markets drop - worries over economic growth
Updated On: Apr 16 2013 05:13:08 AM CDT
World markets fell Tuesday on renewed concerns about the pace of economic growth and after U.S. stocks slumped in the wake of the Boston bombing.
All major European stock market indices were in negative territory. Stocks in Japan and Hong Kong also fell as investors worried that weaker-than-expected growth in China could weigh on the global economy.
In another blow to sentiment, Germany's ZEW indicator of economic sentiment fell more sharply than expected in April.
"Basically, the surveyed financial market experts remain confident, but are less optimistic than they have been in the previous month," said ZEW president Clemens Fuest.
The Nikkei in Tokyo closed 0.4% lower while the Hang Seng in Hong Kong lost 0.5%.
The unsteady trading in Asia followed a selloff in U.S. markets that accelerated after a terrorist attack in Boston late in the trading day.
Two bombs struck near the finish line of the Boston Marathon on Monday. The investigation is still in its preliminary stages, and scores of victims remain hospitalized. The death toll stands at three.
Few details about the source of the attack have been confirmed by authorities, leaving investors to focus on other issues.
"It's a shocking event and a tragedy," said Kerry Series, chief investment officer at 8IP in Sydney. "But I don't think it will have much of an effect at all on markets."
Driving the markets were concerns over slower global growth -- more pronounced in the wake of soft economic data in China and the United States.
China reported Monday that its economy grew at a 7.7% annual rate in the first quarter, much weaker than the 8% most economists were expecting. A separate report also showed industrial production growth has slowed sharply in the country.
China's slump could mean reduced demand for commodities from the world's second-biggest economy and subdued inflationary pressures.
Mining stocks in Australia, which rely heavily on China as an importer of their raw materials, were particularly hard hit.
Gold prices plunged amid a broader slump in commodities Monday and investors flocked to lower risk assets like U.S. Treasuries and safe-haven currencies. The yen and dollar both strengthened.
The 9% drop in gold, its biggest sell-off in decades, pushed the metal to its lowest price in more than two years. Gold prices rebounded slightly Tuesday, adding 1.2%.
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