 "Volatility in Chinese markets has sapped risk appetite globally, sending equities worldwide down the most in more than four years, even as oil hit a 12-year low on Monday")
Global stock indexes fell on Monday, continuing a brutal start to 2016, as China's market tumbled again and the decline in oil prices worsened.
The main US indices gave up earlier gains in morning trading, which came after the S&P 500 and the Dow posted their worst five-day start to the year in history. The pan-European FTSEurofirst 300 index was off 0.2 per cent, also after rising earlier in the session.
Fears over China's economy contributed to last week's declines, and the main Shanghai stock indexes each ended down more than five per cent on Monday. Perceived missteps by China's authorities have stoked concerns in global markets that Beijing might lose its grip on economic policy, even as the No.2 economy looks set to post its slowest growth in 25 years.
"The Chinese situation sets the agenda right now in combination with oil prices," said Hans Peterson, global head of asset allocation at SEB investment management.
The Dow Jones industrial average was down 30.75 points, or 0.19 per cent, at 16,315.7, the S&P 500 shed 6.77 points, or 0.35 per cent, to 1,915.26 and the Nasdaq Composite lost 25.97 points, or 0.56 per cent, to 4,617.66.
Investors were looking to US corporate earnings to help provide confidence, with Alcoa posting results later on Monday and major banks reporting later this week, despite expectations for a second quarter of overall declining earnings.
"The mentality has been pretty negative and I don't see that changing this morning or today until there is more meat on the bones from a data standpoint," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
MSCI's broadest gauge of stocks globally slipped 0.6 per cent, after registering its biggest weekly decline in more than four years.
Oil prices plummeted to 12-year lows, with U.S. crude futures falling to the lowest since late 2003, as traders cited fears over slowing demand in China and a growing inventory glut.
US crude prices fell 4.3 per cent to $31.72 a barrel, while benchmark Brent dropped five per cent to $31.83 a barrel.
"China has torpedoed the hopes of the optimists," David Hufton, of oil brokers PVM Oil Associates, said in a note.
Still, US Treasury yields inched higher as concerns over global growth eased, leading traders to sell some safe-haven US government debt.
Benchmark 10-year notes were down 5/32 in price to yield 2.1472 per cent, from 2.131 per cent late on Friday.
"Last week, Treasuries rallied because Chinese stocks fell and today Chinese stocks fell, but we didn't rally, suggesting the panic from last week seems to have subsided," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
The US dollar was up 0.2 per cent against a basket of currencies, while the euro fell 0.7 per cent against the dollar. '
"Modestly improved risk sentiment was enough to cause the euro to lose some ground against the US dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
