London - World share markets and the euro followed a broad range of other risk assets lower on Monday, as investors refocused attention away from central bank stimulus schemes to weak economic fundamentals and the eurozone's still unresolved debt crisis.
US stock index futures pointed to lower open on Wall Street, extending a steady retreat in Asian and European markets which sent the MSCI world equity index down by 0.45% to 336.15 points.
"The liquidity rally looks like it's over and global growth worries are back on the agenda," Ishaq Siddiqi, a strategist at ETX Capital said.
An unexpected drop in a key German Ifo business sentiment index for a fifth straight month in September underscored the picture of growing economic weakness, which recently prompted many of the world's major central banks to resume efforts to reflate their economies.
"September's fall in the German Ifo business survey is a reminder that even the eurozone's strongest economies are suffering from a serious economic downturn," said Jennifer Mckeown at Capital Economics.
"While Germany might have avoided a recession in Q3, it seems like only a matter of time before the economy starts to contract."
The FTSEurofirst 300, which was flat last week after having notched a near 18% rise since June, was 0.5% lower by the midsession, with London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were off between 0.5% and 1%.
The German data also helped push an already-falling euro down 0.6% to a day's low of $1.2896. the single currency has now shed more than 1.5% from a four-month peak of $1.3173 reached on September 17.
Other parts of the currency market reflected the concerns surrounding global economic health. The growth-linked Aussie dollar slid as its rally sparked by recent central bank stimulus moves ran out of steam, while traditional safety zones the yen and the US dollar both firmed.
"I think the euro's rally has come to an end. Speculators will now be able to build fresh short positions from here rather than going long in the euro," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
For bond markets it was Spanish debt worries that remained the dominant theme.
Madrid is expected to present its 2013 draft budget plan later this week and announce new structural reforms. The results of stress tests on the Spanish banking sector are also due.
These could set the stage for a full-scale bailout although European Union officials have said they did not expect Prime Minister Mariano Rajoy to seek an assistance programme before a key regional election due on October 21.
The slow progress likely in Madrid is driving investors gradually back into the safe-haven German debt market, pushing the yield on 10-year safe Bund down two basis points to 1.54%. Spanish government bond yields were little changed at 5.78%.
"There is still a lot of uncertainty with regards to the situation in Spain. The news flow there is not really conclusive ... so in the very near-term we are in a 'risk off' mode," said Elwin de Groot, senior market economist at Rabobank.
The main commodity markets were also moving lower as the disappointing German data and a firmer dollar pressured prices.
Brent crude oil, which dropped 4.5% last week, fell by $2 a barrel to $109.42. US crude CLc1 was $1.30 lower at $91.59 per barrel.
Industrial metals were also broadly lower while the gold price eased nearly 1% to around $1 758 an ounce.
However, the precious metal is being underpinned by expectations for longer-term price strength, after central banks including the Federal Reserve and European Central Bank announced fresh rounds of monetary policy easing earlier this month.
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