The FTSE 100 index of leading British shares slid 2.7 percent.
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United States benchmark West Texas Intermediate was down 0.3 percent and Brent eased 0.2 percent.
“Japanese companies’ earnings reports are not helping sentiment, either, so the market may stay sluggish for a while”.
The dollar climbed after the Labor Department said Friday that the U.S. jobless rate had fallen to an eight-year low and wage growth picked up.
While the headline employment gain of 151,000 undershot expectations, details were encouraging including a 0.5 percent jump in average hourly earnings – the biggest gain in a year.
Many other Asian indexes were closed Tuesday for the Lunar New Year, including Shanghai, Hong Kong and Seoul. China, a focus of recent market concern, will be closed for the entire week for the holiday.
But despite the lower figure, this is still a robust rate of employment growth, and a trend strong enough to keep bringing unemployment down.
There will likely be some consolidation in currency pairs as markets digest last Friday’s all-important USA nonfarm payrolls report.
“There is a large probability that China’s central bank tires of spending its foreign reserves to defend an overvalued currency in the near future”. Equity markets taking yet another hard hit at the start of the new trading week, with investors fleeing riskier investments in favor of safe havens.
Also over the weekend, North Korea’s launch of a long-range rocket drew worldwide condemnation.
The stock plunge in Tokyo follows losses Monday for US and European indexes. The Nasdaq Composite led session losses, plunging 3.25 percent after a spate of disappointing forecasts from the technology sector.
In the US, the yield on the five-year Treasury also fell to around 1.1112 percent in Asia trading hours, its lowest level since June 2013, while the 10-year Treasury yield fell as low as 1.7396 percent – the lowest level in a year – on Tuesday.
The dollar fell to its lowest level against the yen since November 2014 of 115.170 yen, after doubts about the effectiveness of the Bank of Japan’s negative interest-rate policy drove investors back into the safe-haven currency. Australia’s S&P/ASX 200 was 2.1% lower and New Zealand’s S&P/NZX 50 was down 1.4%.
But Japan’s Nikkei erased early steep losses as the dollar gained on the yen, and ended up 1.1 percent. The Aussie managed to hold its ground against the greenback, staying above 70 US cents but still down 0.7 percent at $0.7037.
“The “fear factor” in markets has morphed from being about an emerging market hard-landing and collapsing oil prices to being about the extent of the slowdown in the developed world and the ability of central banks to reflate asset values yet again”, analysts at Citi said in a note. Asian markets tumbled Tuesday as renewed jitters about the global economy set off…
But nothing was decided, so caution kept gains in check.
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The crude oil futures price fell below the $30 line for the first time in roughly a week in NY on Monday, hitting $29.69 per barrel on dimming prospects that members of the Organization of the Petroleum Exporting Countries will cut production.
