LONDON: Stock markets around the world slid Tuesday as investors played it safe ahead of a key meeting of the US Federal Reserve, with the Bank of Japan abstaining from extra stimulus providing a trigger for selling.
Fresh slides for oil prices and share prices of heavyweight miners heaped further pressure on markets.
Europe's main markets closed down between half and one percentage point, while on Wall Street the Dow off 0.2 percent in midday trading.
"Caution took hold of stock markets on Tuesday ahead of the March meeting of the Federal Reserve," said analyst Jasper Lawler at CMC Markets.
"Equity benchmarks remain close to two-month highs but no extra stimulus from the Bank of Japan and the price of oil at its lowest in over a week led to some modest profit-taking," he added.
London's benchmark FTSE 100 index was weighed down also by a slump in miners' share prices after Chilean miner Antofagasta scrapped its dividend, providing investors with another reminder the industry is suffering from the hefty drop in metals prices.
Antofagasta plunged 11 percent during the session, but recovered part of the ground to close down 4.5 percent. Fellow miner Anglo American tumbled 10.8 percent in London trading.
While most anlysts don't expect the Fed to raise interest rates further at its two-day meeting which ends Wednesday, the markets will be listening carefully for indications for when it will do so next.
The dollar was broadly steady against the euro, but slid against an invigorated yen.
- Bank of Japan inaction -
The Japanese central bank on Tuesday kept its monetary stimulus unchanged as policymakers digested the impact of the negative interest rates announced in January.
The decision was widely expected, although analysts predict Governor Haruhiko Kuroda and his team will unleash more monetary firepower in the coming months to kick-start Japan's weak economy.
Tokyo shares closed down 0.68 percent after the announcement, while the yen, seen as a haven investment, strengthened against its major peers.
Investors were closely watching the BoJ as concerns mount that central banks are low on firepower to boost the sagging world economy.
Last week the European Central Bank unveiled dramatic new stimulus measures, and investors will be watching closely whether the US Federal Reserve drops clues it may delay further raising interest rates.
The Fed held fire in January, but financial markets have since staged a comeback from their worst start to the year in living memory.
Nevertheless investors are still nervous about signs of weak global growth -- particularly in number two economy China.
"The elevated expectations over central banks maintaining their current policy measures to stimulate global growth amid the ongoing financial turmoil have offered a false lifeline to stock markets," said FXTM research analyst Lukman Otunuga.
He added in a note to clients that "fears still linger over central banks running out of ammunition to jumpstart global growth while China woes periodically sour risk appetite".
Slower economic growth in China has weighed heavily on prices paid for raw materials.
Meanwhile on Wall Street, shares were down in midday trading after sentiment was also dented by data showing retail sales dipped in February and the January figure was revised sharply lower, suggesting some weakness in consumer spending, the motor of the US economy.
While the 0.1 percent month-on-month dip in retail sales and food service sales in February was less than expected by analysts, January's sales were revised to a 0.4 percent decline from a 0.2 percent gain.
- Key figures around 1630 GMT -
===============================
London - FTSE 100: DOWN 0.6 percent to 6,139.97 points (close)
Frankfurt - DAX 30: DOWN 0.6 percent at 9,933.85 (close)
Paris - CAC 40: DOWN 0.8 percent at 4,472.63 (close)
EURO STOXX 50: DOWN 0.8 percent at 3,068.22
New York - Dow: DOWN 0.2 percent at 17,191.26
New York - S&P 500: DOWN 0.5 percent at 2,009.99
New York - Nasdaq: DOWN 0.6 percent at 4,721.55
Tokyo - Nikkei 225: DOWN 0.68 percent at 17,117.07 (close)
Shanghai - composite: UP 0.17 percent at 2,864.72 (close)
Hong Kong - Hang Seng: DOWN 0.72 percent at 20,288.77 (close)
Euro/dollar: UP at $1.1104 from $1.1103 on Monday
Dollar/yen: DOWN at 112.95 yen from 113.78 yen
Comments
Comments are closed for this article.