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Shares falls as Nasdaq tumbles, dollar edges higher

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Asian share markets edge higher on pandemic recovery signals

By Herbert Lash and Marc Jones

NEW YORK/LONDON (Reuters) – World share indexes slid and U.S. Treasury yields fell on Tuesday as low trading volume, a lull in economic news and lack of a catalyst to lift stocks higher sparked a sell-off by investors worried further upside in markets is limited.

The tech-rich Nasdaq fell 2.7%, marking its biggest single-day decline in six weeks, while the yield on the 10-year Treasury note fell to a low of 1.557%, a slide that normally would push technology shares higher.

Palladium prices soared to all-time highs, fueled by concerns about short supplies of the auto-catalyst metal as demand gradually improves.

The Refinitiv/CoreCommodity CRB Index traded near three-year highs as commodity prices continue a recent rally as investors bet on rising demand as economies reopen. The surge in commodity prices has spurred talk of an inflation spike.

As investors sold stocks they bought government debt, pushing Treasury prices up and yields lower.

"There's not a lot of conviction among traders of which way markets should go from here," said Patrick Leary, chief market strategist and senior trader at Incapital. "We've priced in a great amount of reopening optimism."

MSCI's benchmark for global equity markets fell 1.23% to 694.67.

On Wall Street, the Dow Jones Industrial Average fell 0.5%, the S&P 500 lost 1.29% and the Nasdaq Composite dropped 2.72%.

Sensitive cyclical sectors including energy and financials, outperformed growth stocks.

In currency markets, the dollar clawed back some ground to partially unwind last month's long decline as investors squared up positions ahead of monthly payrolls data due at the end of the week. [FRX/]

The dollar index rose 0.314%, with the euro down 0.38% to $1.2015. The Japanese yen weakened 0.22% versus the greenback at 109.31 per dollar.

Signs that the world's major central banks remain in no rush to reel in their massive stimulus programs kept 10-year U.S. Treasury yields under 1.65% and Germany's Bund yields below 13-month highs. [GVD/EUR]

Australia's central bank left its key interest rates at near zero overnight for a fifth straight meeting and pledged to keep its policies super-supportive for a prolonged period.

Australia's S&P/ASX200 had risen 0.6% and Hong Kong had climbed 0.7% in thin Asian trading due to holidays in both China and Japan.

For a graphic on India suffering world's worst COVID wave:

https://fingfx.thomsonreuters.com/gfx/mkt/ygdpzormmvw/Pasted%20image%201620131264160.png

Shares falls as Nasdaq tumbles, dollar edges higher 3

Cryptocurrency ether powered to another record peak, nearing $3,500, before paring gains to trade 5.4% lower.

Oil prices rose on Tuesday after more U.S. states eased pandemic-related lockdowns and the European Union sought to attract travelers, though soaring COVID-19 cases in India capped gains.

Brent crude futures rose $1.22 to $68.78 a barrel. U.S. crude futures gained $1.12 to $65.61 a barrel.

Spot gold prices fell $-17.55%.

(Reporting by Marc Jones; Editing by Ed Osmond, Will Dunham and John Stonestreet)

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