Global shares extend losses

in past days, prompting investors to purge risky positions in favour of the dollar.
European shares fell nearly 1 percent, stung by losses in mining and energy shares as gold and oil prices relinquished gains made in Asia due to ongoing concerns about a cooling of the Chinese economy even as inflation remains high.
This may affect demand for natural resources in the world’s No. 2 economy, and such concerns weighed on commodity markets, which looked set to extend a second big rout in less than a week.
Persistent speculation about a possible Greek debt restructuring also cut demand for higher-risk assets and held the dollar – whose vast liquidity makes it a popular choice with investors during periods of uncertainty – near a three-week high versus a currency basket.
A sharp reversal in commodities in Europe served as a reminder of markets’ vulnerability to hefty losses – oil fell more than 5 percent on Wednesday – which will likely steer investors further away from higher-risk assets.
“Markets are worried about high commodity prices, higher inflation, lower consumer spending power, rising interest rates and potential downward GDP growth forecasts especially for Japan, the euro zone and the UK in the near future,” said Derek Lawless, head of WorldSpread France in Paris.
“You can really take your pick in identifying the risks out there. One of them will send us over the cliff.” – Reuters