* Weak US jobs data, Hungary debt spark fresh selling
* Euro drops to lowest in over 4 yrs as investors shun risk
* Asian stock markets slump over 3 percent, oil under $70
* U.S. dollar rallies, further pressuring commodities
By Koh Gui Qing
SYDNEY, June 7 (Reuters) - The euro sank to four-year lows
on Monday as stocks and commodities fell after disappointing
U.S. jobs data and angst about euro zone debt problems fed
fears the world economy may falter in its recovery.
Sharp drops in prices of risky assets across the board
heightened market volatility and further convinced already
nervous investors to play cautious and buy into safe havens.
"The background environment isn't good, and that's the
bottom line. Investors need to be buying things that are
quality," said Alex Boggis, a fund manager at Aberdeen Asset
Management, which manages about $240 billion in investments,
adding that investors should only buy stocks of firms with
strong cash flows.
The euro <EUR=>, which has turned into the barometer for
investor risk appetite in recent weeks after Greece's debt
crisis, fell below $1.1900 to its lowest in more than four
years.
Worries over the euro zone's debt problems grew after
Hungary's government said the country might suffer a
Greece-style debt crisis, giving investors a reason to sell the
common currency. []
Although analysts said the controversial remarks from
Hungary's government were politically motivated, and that
Hungary's economic fundamentals were far better than Greece's,
investors paid no heed.
Against the yen, the euro <EURJPY=> skidded below 108.33
yen to an eight-year trough.
U.S. jobs data that showed the labour market in the world's
No. 1 economy was not healing as well as hoped gave investors
another reason to cut dangerous bets in an uncertain market.
[]
Many investors had hoped strong U.S. job figures would
offset persistent concerns about Europe's sovereign debt
problems. Though a global economic slowdown may now be looming,
few economists believe it will sink back into a recession.
Japan's Nikkei index <> and the MSCI index for Asian
stocks outside Japan <.MIAPJ0000PUS> shed 3.8 percent each.
"There's a real sense of investors taking their money out
of risky assets," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Morgan Stanley Securities.
S&P futures <SPc1> fell 0.7 percent, pointing to further
losses in U.S. stocks later in the day, having already fallen
on Friday to their lowest since February []
The Australian dollar <AUD=D4> and the South Korean won,
both of which are extremely vulnerable to turns in demand for
risk, also suffered.
The Australian dollar struggled at $0.8118. The won
<KRW=KFTC> fell to a two-week low at 1,237.4/8.6 per dollar.
Assets with safe-haven appeal benefited from the scramble
out of from risk. Investors sought safety in the liquidity of
U.S. Treasuries, further adding to demand for the U.S. dollar.
The U.S. dollar index <.DXY> hit a 15-month high of 88.7.
The threat to the recovery and a firmer U.S. dollar fed
pressures on commodity prices. Oil <CLc1> dropped nearly 2
percent to $70.28 a barrel by 0452 GMT and Shanghai copper
<SCFc3>, zinc <SZNc3> and aluminium futures <SAFc3> sank across
the board. []
U.S. economic data showed on Friday that the recovery in
the labour market was not as strong as hoped, with hiring by
U.S. private employers slowing sharply in May.
Although some analysts said cautious hiring plans of U.S.
firms did not herald another recession in the U.S. economy, the
world's largest, stock investors paid no heed. Major U.S. stock
indexes fell by up to 3.6 percent.
(Reporting by Koh Gui Qing; Editing by Clarence Fernandez)
