In US economic data, durable goods orders fell by a record 18.2 per cent in August after lifting by a record 22.5 per cent in July. The fall was in line with expectation (-18 per cent). Excluding volatile transportations orders rose 0.7 per cent in August. US jobless claims rose by 12,000 to 293,000 in the past week. US flash composite PMI eased from 59.7 to 58.8 in September.
European shares fell sharply on Thursday, hitting one-month lows in late trade. The stronger US dollar and resulting weakness in commodity prices hurt mining stocks. The STOXX Europe 600 Basic Resources Index fell 2 per cent and was the biggest decliner in Europe. The FTSEurofirst 300 index fell by 0.9 per cent. The German Dax lost 1.6 per cent while the UK FTSE fell 1 per cent. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 2.9 per cent while Rio Tinto fell 2.4 per cent.
US sharemarkets slumped on Thursday weighed down by a drop in Apple shares. Apple lost 3 per cent after it withdrew an update to its new operating system. Selling was broad-based as geopolitical concerns came to the fore, after the Russian high court paved the way to seize foreign assets. All ten S&P 500 sectors were weaker. The S&P technology index was the worst performer down 1.9 per cent. The Dow Jones index fell by 264 points or 1.5 per cent. The broader S&P 500 index fell by 1.6 per cent, falling through its 50-day moving average. The Nasdaq lost 88 points or 1.9 per cent.
US treasury prices rose on Thursday (yields lower) as geopolitical tensions and uncertainty in equity markets triggered safe-haven demand. US two-year yields fell by 4 points to 0.56 per cent while US 10-year yields fell by 6 points to 2.51 per cent.
Major currencies were mostly weaker against the greenback over the European and US sessions on Thursday. The euro fell from highs near $US1.2770 to around $US1.2705, ending US trade near $US1.2745. The Aussie dollar fell from highs near US88.25c to lows around US87.70c before ending the US session near US87.80c. The Japanese yen strengthened from ¥109.35 per US dollar to ¥108.65, ending US trade near ¥108.70.
World oil prices closed mostly flat in a choppy trading session on Thursday. Abundant global supply and a strong US dollar largely outweighed worries that conflict in the Middle East would disrupt output. Brent crude closed up by US5c or 0.1 per cent to $US97 a barrel while the US Nymex price fell by US27c a barrel or 0.3 per cent to $US92.53 a barrel.
Base metal prices were all weaker on Thursday on the back of the stronger US dollar. Tin (down 2.5 per cent) led the declines with other metals falling between 0.4 per cent and 1.2 per cent. Gold prices rose on Thursday with the Comex gold futures quote higher by $US2.40 an ounce or 0.2 per cent to $US1,221.90 per ounce. Iron ore fell on Thursday, down by US80c to $US78.60 a tonne.
Ahead: In Australia, no economic data is released. In the US the final GDP result for the June quarter is released.
Craig James is chief economist at CommSec