World stock markets showed a decline on Tuesday as profit -taking activity by investors and continued inflationary concerns prompted widespread selling in the market.
The decline came as a strong rise in producer prices last month has raised concerns over inflation while oil prices have soared to a 7 -year high.
According to the U.S. Department of Labor, production prices rose sharply in October as investors bought more government -backed debt bonds. Moreover, the data shows high inflation has been a concern to investors will continue due to tight supply.
Meanwhile, the US consumer price index report to be published on Wednesday will be scrutinized to get an indication of the extent to which producer prices are channeled to consumers whose spending accounts for 70% of the US economy.
US crude oil prices rose 2.98% at $ 84.37 a barrel while Brent oil rose 1.79% at $ 84.92.
The pan-European STOXX 600 index was down 0.19% while MSCI’s worldwide stock gauge was down 0.30% after hitting uncharted highs at the start of the session.
Global equities were at their peak as investors assessed strong earnings as a result of reduced travel restrictions and US infrastructure spending against inflation risks that could lead to tight monetary policy.
The Dow Jones Industrial Average was down 0.31%, the S&P 500 was down 0.35%and the Nasdaq Composite was down 0.6%.
10 -year Treasury Inflation Covered Securities yields have declined -1.21% since August and TIPS 30 yields recorded as low as -0.592%.
The benchmark 10 -year yield was down 6.3 basis points at 1.4341% in the afternoon trading session. 30 -year bond yields were as low as 1.795% since July and last fell 6.6 basis points to 1.8218%.
The dollar index was down 0.93% while the Euro was up 0.05% at $ 1.1592.
The Japanese yen strengthened 0.34% against the U.S. dollar at 112.86 per dollar while Sterling traded at $ 1.3562, up 0.01%.
Oil prices rose following the passage of a U.S. infrastructure bill and Chinese export growth supported the outlook for energy demand.
Saudi Arabian state -owned producer Aramco also raised its official selling price of crude oil.
Gold prices rose to their highest level since early September in line with a weaker dollar ahead of US inflation data to be released later this week.
Gold rose 0.4% to $ 1,830.67 an ounce.
