NEW YORK (Reuters) - Concern about a potential economic slowdown in China pressured world stock indexes on Monday and helped pushed Brent crude oil below $97 a barrel.
Emerging markets sank, with the MSCI Emerging Market index .MSCIEF falling 1.3 percent, its biggest daily percentage drop since March. The dollar rose against the Australian dollar.
Signs of disagreement between major economic powers on the need for extra stimulus further clouded the outlook.
China’s finance minister, Lou Jiwei, on Sunday said the country wouldn’t dramatically alter its economic policy because of any one economic indicator. His comments came days after many economists lowered growth forecasts for China following the release of data that showed factory output in August grew at its weakest pace in nearly six years.
Investors worried a closely watched gauge of Chinese manufacturing, due on Tuesday, could indicate activity was contracting.
“The China demand story is a new variation of a story we’ve been worried about for a few months,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Mining companies declined following the concerns about China. U.S.-listed shares of global miner BHP Billiton (BHP.N) dropped 3.2 percent to $61.28, while shares of the Brazilian miner Vale (VALE.N) fell 4.7 percent to $11.44 in New York.
The Dow Jones industrial average .DJI fell 107.06 points, or 0.62 percent, to 17,172.68, the S&P 500 .SPX lost 16.11 points, or 0.8 percent, to 1,994.29 and the Nasdaq Composite .IXIC dropped 52.10 points, or 1.14 percent, to 4,527.69.
MSCI's global share index .MIWD00000PUS was down 0.8 percent, while European shares .FTEU3 ended down 0.6 percent.
The dollar rose against the Australian dollar and emerging market currencies hurt by weaker commodity prices.
The Australian dollar touched a seven-month low of $0.8854 AUD= against the U.S. dollar. The dollar .DXY was flat against most major currencies, though.
Concerns over global growth and suggestions at a meeting of Group of 20 officials that China might hold off from further economic stimulus weighed. China and Australia are major trading partners, and the Australian currency often is used as a liquid proxy for China plays.
The closely watched Chinese manufacturing number will be released on Tuesday, as will other global flash business activity surveys for September.
The G20 officials also said they were close to adding $2 trillion to the global economy, but there were signs of disagreement.
Brent crude for November delivery LCOc1 fell $1.42 to settle at $96.97 a barrel. The expiring U.S. October crude contract CLV4 fell 89 cents to settle and go off the board at $91.52 a barrel, down for a fourth consecutive session.
“China growth is slowing, which is a driver for crude,” said Oliver Sloup, director of managed futures at iitrader.com in Chicago.
In the U.S. Treasuries market, long-dated yields dipped to their lowest in over a week on the view that lingering weakness in U.S. economic data may force the Federal Reserve to maintain a dovish stance on raising interest rates.
Ten-year U.S. Treasury notes US10YT=RR were up 6/32 in price to yield 2.56 percent, from a yield of 2.59 percent late Friday. U.S. 30-year Treasury bonds US30YT=RR added 8/32 to yield 3.29 percent, from a yield of 3.3 percent late Friday. The yield hit a session low of 3.26 percent, its lowest since Sept. 11.
Additional reporting by Robert Gibbons,; Michael Connor and Chuck Mikolajczak in New York; Editing by Meredith Mazzilli, James Dalgleish and Chizu Nomiyama