China, Portugal and Apple are raining on the markets' parade this morning, pushing stocks broadly lower across the world and across sectors.
Wall Street was set to open lower, with Dow Jones industrial futures down 28 points, or 0.2 per cent, to 12,309 and S&P 500 futures losing 4.7 points, or 0.3 per cent, to 1,324.50. Nasdaq futures were down 18.5 points, or 0.8 per cent, at 2,322.
Apple Inc. shares were sharply lower in premarket trading after Nasdaq OMX Group Inc. said it would rebalance the Nasdaq-100 Index on May 2, reducing Apple's weighting to 12 per cent from 20 per cent.
China's central bank raised interest rates for the fourth time since October in a bid to bring inflation under control. That's in addition to six official increases in bank reserves over the same period and follows a declaration by China's top leaders that controlling inflation was their most important task this year.
The move knocked metals lower, since China is the world's largest consumer of base metals. Copper for three-month delivery on the London Metal Exchange (LME) traded at $9,285 a tonne. (If you'd like to read more on copper, may we recommend Globe columnist David Parkinson's analysis:
Gold eased, as did silver, which earlier hit a 31-year high of $38.77 an ounce.
Concerns over Europe also pushed shares lower after Moody's Investors Service cut Portugal's credit rating by one notch, its second downgrade in less than a month. There were also reports that Portuguese banks may be threatening to stop buying government bonds to pressure Lisbon into seeking a financial bailout from the European Union, following the same path as Greece and Ireland. Portugal's bond yields rose to a euro lifetime high 9.033 per cent and the euro retreated from a five-month high against the U.S. dollar.
Britain's FTSE 100 dropped 0.3 per cent to 6,000.45 and Germany's DAX was 0.4 per cent lower to 7,151.30. France's CAC-40 also headed south, by 0.5 per cent to 4,021.29.
Japan's benchmark Nikkei 225 index dropped 1.1 per cent to 9,615.55, amid frantic efforts to control a radioactive leak at a nuclear plant damaged by a powerful earthquake and tsunami that struck off the country's northeastern coast on March 11.
World stocks measured by MSCI All-Country World Index fell 0.2 percent after hitting six-week highs in the previous session, while emerging market shares were flat.
Benchmark crude for May delivery was down 35 cents to $108.12 (U.S.). The U.S. dollar rose to 84.25 yen from 84.04 yen late Monday in New York. The euro fell to $1.4175 from $1.4216. The European Central Bank is widely expected on Thursday to raise rates by 25 basis points from a record low of 1 percent to tame inflationary pressures.
Sonali Verma