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GLOBAL MARKETS-Stocks, dollar down on U.S. election worries; oil tumbles

Published 03/11/2016, 02:23 am
Updated 03/11/2016, 02:30 am
© Reuters.  GLOBAL MARKETS-Stocks, dollar down on U.S. election worries; oil tumbles
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* Investors flee risk across world markets

* U.S., European stocks at 4-month low

* Gold, safe-haven assets shine; dollar slips

* Oil down on chance of large U.S. crude build (Updates to U.S. trading, changes byline, dateline; previous LONDON)

By Saqib Iqbal Ahmed

NEW YORK, Nov 2 (Reuters) - Global equity prices and the dollar slid for the second straight day on Wednesday, while safe-haven assets such as gold rallied as investors were rattled by signs the U.S. presidential race was tightening just days before the vote.

Uncertainty about the outcome of the election pushed U.S. Treasury yields to their lowest in a week, while crude oil extended losses after U.S. government data showed a much bigger-than-expected build in inventories.

Investors were beginning to rethink their long-held bets of a Nov. 8 victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, deepening the recent decline across major stock markets.

Weakness on Wall Street, on the heels of falling Asian and European stocks, sent MSCI's 47-country "All World" index .MIWD00000PUS down 0.42 percent.

While Clinton held a 5 percentage point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, some other polls showed her Republican rival ahead by 1-2 percentage points.

"As the polls change, the market is growing more nervous and is beginning to price in a Trump presidency," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. Clinton represents a status quo, there is little clarity on what kind of impact Trump's policies will have on trade and foreign policy," Bakhos said.

A Reuters equity market poll last month showed a majority of forecasters predicted that U.S. stocks would perform better under a Clinton presidency than a Trump administration. U.S. private employers added 147,000 jobs in October, below economists' expectations, a report by a payrolls processor showed. U.S. Federal Reserve resumed its two-day policy meeting and was expected to keep interest rates unchanged while setting the stage for a hike in December. Dow Jones industrial average .DJI fell 27.09 points, or 0.15 percent, to 18,010.01, the S&P 500 .SPX lost 7 points, or 0.33 percent, to 2,104.72 and the Nasdaq Composite .IXIC dropped 15.77 points, or 0.31 percent, to 5,137.81.

MSCI's international emerging markets share price index .MSCIEF touched a three-week low. Europe's broad FTSEurofirst 300 index .FTEU3 was down 1.1 percent at 1,309.99.

The U.S. dollar fell against the euro, yen, Swiss franc and sterling on continued nervousness about the outcome of the election.

"People are pricing in higher odds of a Trump victory," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman in New York. dollar index .DXY , which measures the greenback against a basket of six major rivals, fell about 0.5 percent to 97.226, its lowest since Oct. 11.

Demand for safe-haven bonds sent U.S. Treasury yields to a 1-week low of 1.79 percent in overnight trading. 10-year notes US10YT=RR were last up 4/32 in price to yield 1.81 percent, down from 1.82 percent late Tuesday.

Crude oil prices slumped hard after U.S. Energy Information Administration data showed U.S. crude stockpiles rose sharply last week as refineries cut output. crude LCOc1 was down 3.14 percent at $46.63 a barrel, while U.S. crude CLc1 was down 3.2 percent at $45.17.

Gold rallied to a one-month high as falling stocks and a lower dollar burnished the appeal of precious metals as a haven from risk. Spot gold prices XAU= were up 1.22 percent to $1,303.56.

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