* U.S. bond prices turn positive, yields down after hitting
* Wall Street stocks pare losses after China selloff
* Euro turns positive vs dollar, hits session highs
By Angela Moon
NEW YORK, June 24 Global equity markets and bond
prices fell on Monday but stabilized from an earlier selloff as
some investors took the weakness as an opportunity to buy,
although the U.S. central bank's plans to scale back its bond
buying weighed heavily on market sentiment.
Prices on the U.S. 30-year Treasury bond turned positive by
late afternoon on Monday, rising to session highs, as buying for
bonds, stocks and other assets emerged.
But despite the modest bounce, the 30-year bond yield was
not that far below the 22-month high it set earlier due to fears
the Federal Reserve might pare its bond purchases later this
year and raise short-term interest rates not too long after.
U.S. stocks also recouped losses by late afternoon as U.S.
treasury prices rose, but remained down with the S&P 500
off about 0.7 percent.
The euro hit session highs, rallying from nearly three week
lows, in tandem with U.S. stocks paring their losses and
commodities gaining sharply.
The euro rose as high as $1.3143, recovering from
lows of $1.3058, its weakest level since June 5. It was last at
$1.3139, up 0.1 percent.
"We're seeing a stemming of the sell-off in risky assets and
that has caused some mild profit-taking on the dollar," said Joe
Manimbo, senior market analyst at Western Union Business
Solutions in Washington.
The U.S. 30-year Treasury bond last traded up
16/32 in price with a yield of 3.565 percent, down 3 basis
points from late on Friday. Earlier, the 30-year yield hit 3.652
percent, an intraday level not seen since August 2011, according
to Reuters data.
The shift out of assets that have benefited most from cheap
money has been sharpest in the U.S. debt market. The U.S. bond
market erased about $390.8 billion in the five days ended June
21, measured by the market value of the BofA/Merrill Lynch Broad
During the same period, global equity markets lost more than
$1 trillion, based on the market value of the MSCI World Index
. The U.S. stock market alone lost about $354.4
billion during the five-day period.
The declines stem from the Federal Reserve's signal last
week that the era of cheap central bank money - which caused
many assets to hit record highs - was coming to an end. But they
have been exacerbated by China's battle to transition to a
Both events are unprecedented and have driven a sharp rise
in risk aversion among investors fearing a long period of
volatility across markets.
Investor sentiment also was hurt by a cash crunch in China,
which could further slow Chinese growth. Markets in Shanghai and
Hong Kong posted their biggest daily losses in almost four
Brent crude at one point fell to its lowest in three weeks
and U.S. crude oil slid below its 100-day moving average as
investors were worried a credit squeeze in China could dampen
economic growth in the world's No. 2 oil consumer.
Gold prices also fell, extending last week's 7 percent
MSCI's benchmark index for stocks in the emerging world
fell 1.6 percent, extending losses for a fifth
straight day to touch one-year lows.
MSCI's main world equity index, which tracks
stocks in 45 countries, shed more than 1 percent to add to last
week's 3.2 percent loss, its worst weekly fall since May 2012.
The concerns over China's economic health spread to mining
stocks in Europe, adding to worries about the impact of the
Fed's tapering and pushing the FTSEurofirst 300 index
of top companies down 1.6 percent.
The Euro STOXX 50 Volatility index, known as the
VSTOXX, jumped to a nine-month high, signaling a sharp rise in
risk aversion among investors.
European equity markets weakened despite data showing German
business morale picking up for a second straight month in June,
pointing to a slow recovery for Europe's largest economy.