Global equity markets traded slightly lower on Tuesday after their worst first-day performance in years as concerns about the global economy weighed on sentiment and pushed traders to seek the relative safety of the low-risk yen.
Crude prices also fell on concerns about the pace of growth in China, the world’s second-largest oil consumer. News that Chinese rail freight volumes logged their biggest-ever annual decline in 2015 added to economic growth worries.
A rally in mining and telecom stocks helped European shares to edge slightly higher in volatile trade, but shares on Wall Street fell after a brief attempt to stay positive.
MSCI’s all-country world stock index fell 0.15 percent and its emerging markets index fell 0.04 percent.
On Wall Street, the Dow Jones industrial average fell 52.12 points, or 0.3 percent, to 17,096.82. The S&P 500 slid 0.99 points, or 0.05 percent, to 2,011.67 and the Nasdaq Composite lost 2.45 points, or 0.05 percent, to 4,900.64.
“The main reason for the uncertainty is China, given that company numbers and the macroeconomic picture in Europe and the U.S. have not changed,” said Alessandro Allegri, chief executive of Italian asset manager Ambrosetti Asset Management.
In Europe, the pan-regional FTSEurofirst 300 index closed up 0.44 percent to a preliminary 1,407.32. But the heavyweight German index DAX closed slightly lower.
The yen climbed to its strongest level since April against the euro and hovered at its highest since October versus the dollar. The Japanese currency is traditionally sought at times of risk aversion.
The yen jumped more than 1 percent against the euro, rising to 127.75.
Against the dollar, the yen was up 0.3 percent on the day at 119.06. yen, according to EBS data.
The euro fell 0.92 percent to $1.0729.
The oil market largely shrugged off rising political tensions in the Middle East. On Tuesday, Kuwait recalled its ambassador to Iran after attacks on Saudi missions by Iranian protesters, state news agency KUNA reported.