Stocks fell around the world, with U.S. equities headed for the lowest since August, and bonds jumped as oil’s plunge past $30 sent markets reeling. Treasuries extended gains as U.S. data did little to calm nerves frayed by concern that global growth is slowing.
The Dow Jones Industrial Average sank more than 400 points, European stocks fell to the precipice of a bear market and the Shanghai Composite Index wiped out gains from an unprecedented state-rescue campaign. Oil plunged past $30 a barrel as Iran prepares to export into a global supply glut.
A measure of default risk for junk-rated U.S. companies surged to the highest three years. Yields on 10-year Treasury notes dipped under 2 percent, while the dollar extended a rally. Gold surged with the yen on haven demand.
Crude’s drop to a 12-year low is sending shock waves around the world at the same time concern is mounting that China’s policy interventions will fall short of stoking growth in the world’s second-largest economy.
Energy firms are laying off workers and currency markets from commodity-producing countries are in turmoil. The slump is also denting the outlook for inflation around the world, causing traders to curb bets on how far the Federal Reserve will raise interest rates this year.
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