World shares fell for the fifth day running on Thursday, sliding back towards two-year lows on growing unease about global growth, while emerging markets continued to gnaw at investor confidence.
A 2.2 percent tumble for Tokyo's Nikkei as Japan returned from an extended break set the tone in Asia, while some encouraging German and French data and a 6 per cent bounce in Volkswagen shares helped Europe's FTSEurofirst claw back into positive territory after a shaky start.
Confidence in France's industrial sector hit its highest since July 2011 while business confidence in Germany rose despite the recent signs of weakness in China, one of its big export partners.
The euro was also still on the rise after European Central Bank chief Mario Draghi on Wednesday appeared to suggest the bank was not as close to expanding its money printing programme as had been thought. US Federal Reserve head Janet Yellen is due to speak later.
While there are worries that a tightening in US monetary policy could slow global growth, investors are also starting to wonder whether not raising rates could be even more concerning. "I'm really convinced that what we are seeing at the moment is the epitome of the QE (quantitative easing) trap," said Didier St Georges, a member of the investment committee at fund giant Carmignac. "QE is not good news for financial market assets anymore."
Back in the currency market, the dollar was starting to find some traction again as the market mood appeared to be turning more positive in Europe. Commodity markets were also enjoying some relief after a frenetic few weeks. Oil prices bounced back after a 2.7 per cent fall overnight on an unexpectedly large buildup in US petroleum stocks.
Brent futures were up 0.7 per cent to $48 per barrel with U.S. crude futures up 0.9 per cent at $44.90. Platinum, used in catalytic converters to clean up exhaust emissions, also rebounded having slid to its lowest level in more than six-and-a-half years on fears that the VW scandal over rigged emissions tests could reduce demand from the auto sector. It last stood at $944.00 per ounce, having fallen to as low as $924.50.
Reuters
