Local markets were subdued this morning after all the major indexes across Europe, the United States and Asia closed down last night amid the continuing global sell off following the first quarter rally in equities.
In the United States the Dow Jones Industrial Average closed down for the fifth straight day, ending the session at its lowest level since the end of January, as European sovereign debt fears resurfaced. The index fell 1.65 per cent, the biggest one day loss since Novemeber 2011. Japan's Nikkei hit its worse losing streak in 3 years after closing down for the seventh straight day.
Investor fears were focussed on Europe. Yields on Spanish 10 year bonds rose 22 basis points yesterday and reached a high of 5.99 per cent , up from less than 4.9 per cent on March 1, over worries the country has failed to stabalise its debt problem.
In a sign of the level of concern, investors flocked into safe haven holdings like German Bunds, sending yields falling.
The news weighed on local markets, which were buoyed in the first quarter by the global demand for equities, with both UAE bourses opening broadly flat. The Abu Dhabi Securities Exchange General Index edged lower at 2,546.68, down 0.01 per cent. The Dubai Financial Market General Index was 0.21 per cent down at 1,674.87.
Investors will hope for comfort when the US Federal Reserve publishes its Beige Book today, a survey of activity across Fed districts which provides a qualitative assessment of developments in economic activity.