NEW YORK: Uncertainty about the global economy and anxiety over Europe's debt crisis pushed major stock markets sharply lower on Friday and sent the euro to a six-week low against the US dollar. Investors shunned riskier assets, moving away from commodities and higher-yielding currencies and flocking to safe-haven assets such as the dollar and US government bonds. Oil fell as the dollar strengthened, but crude managed to stage a rebound before the US market close, helped by stronger-than-expected economic growth data from Germany and France and by short-covering. US inflation raced to a 2-1/2-year high in April as food and gasoline prices rose, even though there was little sign of a broader pick-up in prices. The recent volatility in commodity prices and the looming end of the Federal Reserve's easy-money policy further weighed on sentiment. “Right now we are in risk-off mode. There is nervousness about the global economy,” said David Watt, senior currency strategist at RBC capital Markets in Toronto. “This is not just the dollar coming back but everybody is getting a haircut.” World stocks, as measured by the MSCI world equity index, fell 0.6 percent to 344.15, having hit a more than three-week low earlier. Thomson Reuters global stock index dropped 0.7 percent. The Dow Jones industrial average fell 90.18 points, or 0.71 percent, to 12,605.93. The Standard & Poor's 500 Index edged down 9.08 points, or 0.67 percent, to 1,339.58. The Nasdaq Composite Index lost 27.05 points, or 0.94 percent, to 2,836.03. The pan-European FTSEurofirst 300 index ended down 0.4 percent. Emerging stocks lost 0.2 percent. The euro traded down against the dollar, as investors' anxiety increased ahead of meetings of European policy makers next week. The euro is likely to remain pressured until at least after investors digest any outcome. The euro fell as low as $1.4065 on trading platform EBS, the weakest since April 1. It was last down 0.9 percent at $1.4112. A Eurogroup meeting of euro zone finance ministers is due to be held on Monday, followed on Tuesday by a meeting of European Union finance ministers. There are doubts whether a substantial agreement to help Greece manage its debts will emerge from the meetings, keeping uncertainty high over how long the country can avoid a restructuring. Concerns about Greece has pushed the euro down more than 5 percent from a peak near $1.4940 hit in early May.
