# Stocks tumble globally on raft of economic, political worries
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-11
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Global Stock Index Hits Two-Year Low Amid Recession Fears
Meta Description: Follow the latest updates on global stock index dropping, oil prices sinking, inflation fears, Russia-Ukraine war, and more. Stay informed with Reuters.
URL: https://financedigest.com/stocks-tumble-globally-on-raft-of-economic-political-worrieshtml

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By Sinéad Carew and Dhara Ranasinghe

LONDON/NEW YORK (Reuters) – MSCI’s global index of stocks hit its lowest level in almost two years on Tuesday while oil prices sank on fears about the potential for a global recession as central banks rapidly increase interest rates in an effort to tame inflation.

Adding to pressure were concerns about the upcoming third quarter earnings season and a U.S. inflation report, along with escalation in the Russia-Ukraine [war and COVID-19 cases in China](https://www.financedigest.com/russia-sharply-scales-back-far-east-war-games-with-china.html "Russia sharply scales back Far East war games with China").

In addition, the International Monetary Fund on Tuesday warned of a disorderly repricing in markets, [saying global financial stability risks](https://www.financedigest.com/financial-risks-of-climate-change-overplayed-senior-hsbc-banker-says.html "Financial risks of climate change overplayed, senior HSBC banker says") have increased, raising the risks of contagion and spillovers of stress between markets.

U.S.-led NATO said member states were boosting [security as G7 leaders](https://www.financedigest.com/infosecurity-europe-agenda-spotlights-innovation-as-security-leaders-address-cybersecurity-spend-in-the-face-of-economic-headwinds.html "Infosecurity Europe agenda spotlights innovation as security leaders address cybersecurity spend in the face of economic headwinds") condemned Russia’s escalating attacks in Ukraine. Russian missiles pounded Ukraine for a second straight day, after dozens of air raids on Monday that killed 19 people, wounded more than 100 and [cut power supplies](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks").

“It’s just the consistent lack of good news. Russia’s increased attacks on Ukraine is probably the larger story, but the continued fear about inflation and the concern about coming [earnings numbers are all weighing on the market,”](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") said Rick Meckler, partner at Cherry Lane Investments.

The Dow Jones [Industrial Average](https://www.financedigest.com/average-annual-uk-grocery-bill-highest-since-at-least-2008-industry-data.html "Average annual UK grocery bill highest since at least 2008 -industry data") rose 41.48 points, or 0.14%, to 29,244.36; the S&P 500 lost 24.5 points, or 0.68%, to 3,587.89; and the Nasdaq Composite dropped 117.27 points, or 1.11%, to 10,424.83.

The pan-European STOXX 600 index lost 0.70% and MSCI’s gauge of stocks [across the globe](https://www.financedigest.com/germany-u-s-agree-to-new-covid-curbs-as-omicron-spreads-across-globe.html "Germany, U.S. agree to new COVID curbs as Omicron spreads across globe") was down 1.00%. Earlier in the session, the MSCI index had fallen 1.5% to 549.19, its [lowest level since](https://www.financedigest.com/uk-mortgage-approvals-hit-lowest-since-june-2020.html "UK mortgage approvals hit lowest since June 2020") Oct. 30, 2020.

Emerging [market stocks](https://www.financedigest.com/compelling-tips-to-make-profitable-investments-in-the-stock-market.html "Compelling Tips to Make Profitable Investments in the Stock Market") were down 2.25% after hitting their lowest level since April 2020 and are on track for a near-30% tumble year-to-date, its biggest annual decline since the 2008 global financial crisis.

Exacerbating global growth [worries was news from China that Shanghai and other big](https://www.financedigest.com/stocks-falter-as-economic-worries-nag-nz-delivers-big-rate-hike.html "Stocks falter as economic worries nag, NZ delivers big rate hike") Chinese cities have ramped up testing for COVID-19 as infections rise, with some local authorities hastily closing schools, entertainment venues and tourist spots.

GILT RESPITE

Also impacting the [global market was the Bank](https://www.financedigest.com/credit-suisse-54-billion-lifeline-offers-limited-respite-to-global-banks.html "Credit Suisse billion lifeline offers limited respite to global banks") of England’s latest efforts to shore up the battered bond market.

Citing a “material risk” to financial stability, the BoE said it would buy up to 5 billion pounds of index-linked debt per [day from Tuesday until the end](https://www.financedigest.com/amazon-to-lay-off-staff-in-u-s-canada-and-costa-rica-by-end-of-day.html "Amazon to lay off staff in U.S., Canada and Costa Rica by end of day") of the week.

Bonds [globally](https://www.financedigest.com/global-equities-gain-as-rising-bond-yields-pressure-gold.html "Global equities gain, as rising bond yields pressure gold") have been sideswiped by the rout in UK government bonds, known as gilts, pushing yields on U.S. Treasuries up sharply on [fears that UK pension funds were being forced into fire sales](https://www.financedigest.com/logitech-quarterly-sales-fall-22-as-slowdown-fears-bite.html "Logitech quarterly sales fall 22% as slowdown fears bite") of assets.

Benchmark 10-year notes were up 2.5 [basis points](https://www.financedigest.com/fed-officials-still-leaning-to-75-basis-point-rate-hike-in-july.html "Fed officials still leaning to 75-basis-point rate hike in July") to 3.910%, from 3.885% late on Friday. The 30-year [bond last fell 28/32 in price to yield](https://www.financedigest.com/wall-st-stocks-fall-bond-yields-rise-as-china-drops-quarantine-rule.html "Wall St stocks fall, bond yields rise as China drops quarantine rule") 3.8963%, from 3.842%. The 2-year [note last rose 2/32 in price](https://www.financedigest.com/uk-house-prices-end-2022-on-a-weaker-note-after-pandemic-boom.html "UK house prices end 2022 on a weaker note after pandemic boom") to yield 4.2786%, from 4.308%. \[US/\]

The U.S. [dollar edged higher](https://www.financedigest.com/wall-street-stocks-power-higher-as-treasury-yields-and-dollar-ease.html "Wall Street stocks power higher as Treasury yields and dollar ease") in choppy trading, adding to recent gains ahead of a key inflation report later this week that is expected to show persistently strong price pressures.

Overall, dollar sentiment has remained positive as [worries about rising interest rates and geopolitical tensions have unsettled investors](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc"), while Japan’s yen hovered near the level that prompted last month’s intervention.

In currencies the [euro was up 0.05% against the dollar](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro") at $0.9705. The Japanese [yen was flat versus the greenback at 145.70 per dollar](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"), while Sterling was last trading at $1.108, up 0.23% on the day. \[FRX\]

Japanese [Finance Minister](https://www.financedigest.com/scottish-finance-minister-kate-forbes-to-run-for-countrys-leadership.html "Scottish finance minister Kate Forbes to run for country’s leadership") Shunichi Suzuki said the United States showed understanding to “a certain extent” on Tokyo’s currency market intervention last month, giving Japan’s first public indication of U.S. [backing for the move](https://www.financedigest.com/analysis-at-world-cup-saudi-crown-prince-moves-back-on-to-global-stage.html "Analysis-At World Cup, Saudi crown prince moves back on to global stage").

In commodities oil prices fell, extending the previous session’s decline, as recession fears and a flare-up in COVID-19 cases in China raised concerns over [global demand](https://www.financedigest.com/artificial-intelligence-goes-global-demand-for-ai-reaches-four-continents-in-three-months-new-figures-from-synechron-show.html "Artificial Intelligence goes global: demand for AI reaches four continents in three months, new figures from Synechron show"). \[O/R\]

U.S. crude recently fell 1.6% to $89.67 per barrel and Brent was at $94.67, down 1.58% on the day.

Gold wobbled near a one-week low with [price moves restrained as investors](https://www.financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gain.html "Investors warn big consumer firms over price hikes as competitors gain") sat tight before the upcoming U.S. [inflation report that is expected](https://www.financedigest.com/ecb-survey-shows-rising-inflation-expectations-despite-energy-price-falls.html "ECB survey shows rising inflation expectations despite energy price falls") to reinforce the Federal Reserve’s bullish stance.

Spot gold added 0.1% to $1,669.50 an ounce. U.S. gold [futures gained](https://www.financedigest.com/geoengineering-marks-scientific-gains-in-u-n-report-on-dire-climate-future.html "Geoengineering marks scientific gains in U.N. report on dire climate future") 0.26% to $1,671.60 an ounce.

(Reporting by Sinéad Carew in New York, Dhara Ranasinghe in London; Additional reporting by Bansari Mayur Kamdar in Bengaluru, Samuel Indyk in London ; Editing by Jacqueline Wong and David Evans)


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