Oil prices plunged, global stocks tumbled and the euro shed more than 1.0% on Thursday after news of disappointing private sector activity in Europe and China, coupled with a rise in US jobless claims, sent a chill through global financial markets. Oil prices crashed more than $8 to a four-month low after the world?s consumer nations said they would release emergency oil reserves.
Exacerbating fears of slower growth were plans by the International Energy Agency to release 60 million barrels of oil from strategic inventories. ? It could be a signal of the overall the level of concern about a slower global economy,? said Omer Esiner, senior market analyst at Commonwealth Foreign Exchange in Washington.
European shares declined further and and government debt prices on both sides of the Atlantic extended gains after initial claims for state unemployment benefits climbed more than expected last week.
Gold fell by almost 2% to hit its lowest in nearly and the euro hit an all-time low against the Swiss franc as anxiety about Greece and a slowing US economy damped investors? risk appetite and encouraged a bid for safety.
The euro fell 1.3% to $1.451, its lowest level in nearly a week and also hit a fresh record low at 1.1873.
Compounding concerns, the euro zone private sector grew modestly, and would have shrunk without the support of Germany and France, while China?s factory sector barely expanded even as inflation eased, PMIs showed.
The data come a day after the US Federal Reserve said the pace of the US recovery was proceeding more slowly than it had expected, but pledged no new help for the economy once its bond purchase programme expires this month.
World stocks as measured by MSCI?s all-country world stock index were down 1.1%, leaving the index flat so far this year. On Wall Street, the Dow Jones industrial average was down 166.76 points, or 1.38%, at 11,942.91. The Standard & Poor?s 500 stock index was down 18.01 points, or 1.40%, at 1,269.13. The Nasdaq Composite Index was down 35.95 points, or 1.35 %, at 2,633.24.
Brent and US crude oil futures extended losses in volatile trading after the Labor Department a report showed initial claims climbed 9,000 to a seasonally adjusted 429,000. Economists had expected claims to come in at 415,000.
In London, ICE Brent crude oil for August delivery fell $5.15 to $109.06 a barrel. On the New York Mercantile Exchange, the August contract, fell 4.08 to $91.33 a barrel.
Spot gold fell by as much as 1.99% to a session low of $1,518.40 an ounce. Prices later ticked up a bit to $1,524.46.
US Treasuries briefly trimmed an early advance after the IEA announced it would release strategic crude reserves.