‘Perfect storm’ of risk rages globally

European and US shares slid for a third day yesterday, while treasury prices jumped as the nuclear crisis in Japan raised concerns about slower worldwide growth.

Investors also kept an eye on tensions in Bahrain as well as on euro zone borrowing costs, especially in Portugal.

On Wall Street, the main US stock indices fell 1 percent after investors were rattled by EU energy commissioner Guenther Oettinger, who said: “In the coming hours, there could be further catastrophic events, which could pose a threat to the lives of people on the island.”

US stocks opened lower as the price of Brent crude oil rose to an intraday high above $111 (R767) a barrel after Bahraini security cracked down on protesters, with fighting in Libya simmering in the background.

“There is a perfect storm of uncertainty right now in terms of global growth, and markets are taking that into account,” said Oliver Pursche, the president of Gary Goldberg Financial Services in New York.

Euro zone debt worries resurfaced, pressuring the euro. Portugal’s 12-month borrowing costs rose at a bill auction after a two-notch rating downgrade by Moody’s, showing the country remains under pressure.

Some sectors began to readjust after a worldwide battering of riskier assets following the disasters that have hit Japan, the third-largest economy. But fresh reports of instability at a Japanese nuclear plant deepened investor fears.

The MSCI world stock index shed 0.25 percent. But Asian stocks rallied, with Tokyo’s Nikkei gaining 5.7 percent.

US and European markets slid after US producer inflation surged to its fastest rate in one-and-a-half years last month.

The yen pushed to a four-month high versus the dollar as investors speculated insurers would repatriate the unit to pay for claims. Japan’s nuclear crisis was seen as triggering haven yen demand, raising the prospect of intervention to stem big gains

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- Business Report