“Global stocks fell, led by the biggest drop in Japanese shares since the aftermath of the Fukushima disaster, while metals sank as Chinese manufacturing unexpectedly contracted and speculation mounted the Federal Reserve will cut bond purchases. The yen and Treasuries rose.
The MSCI All-Country World Index declined 1.2 percent at 7:20 a.m. in New York. Japan’s Topix Index (TPX) slumped 6.9 percent, the most since March 2011. Standard & Poor’s 500 Index futures fell 0.8 percent, paring losses of as much as 1.4 percent. The yen strengthened against its 16 major peers, surging 1.4 percent to 101.79 per dollar. The yield on 10-year Treasuries slid four basis points to 2 percent. Copper retreated 2 percent and oil slipped 0.8 percent.
Factory output in China shrank for the first time in seven months, a report from HSBC Holdings Plc and Markit Economics showed. Fed Chairman Ben S. Bernanke told lawmakers yesterday a premature withdrawal of stimulus could endanger economic recovery as policy makers debated tapering the pace of bond purchases. Japan’s Topix had surged 48 percent this year to yesterday and the S&P 500 rose to a record this week as central banks worldwide pledged stimulus measures to bolster growth.
“We got the perfect storm for risky assets, with negative signals from both monetary policy and macro-fundamentals,” Witold Bahrke, who helps oversee $55 billion as senior strategist at PFA Pension A/S in Copenhagen, wrote in message. “Quantitative-easing fears got boosted yesterday, which can have quite an effect in an extremely central-bank manipulated market.”…”
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