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GLOBAL MARKETS-Crude rout hits stocks, safe-haven assets sought
* Brent crude on track for sharp weekly loss
* Wall Street follows European shares lower
* German 10-year bond yield at record low (Adds U.S. market open, changes byline, dateline; previous LONDON)
By Herbert Lash
NEW YORK, Dec (Shanghai: 600875.SS - news) 12 (Reuters) - The relentless slide in oil prices pressured energy stocks and currencies exposed to crude exports on Friday, while dampening appetite for riskier assets and encouraging investors to seek safety in core government bonds.
The price of Brent crude fell to lows last seen in July 2009, with the global oil benchmark slipping toward $62 a barrel on concerns over a worldwide supply glut and weak demand.
Brent is down almost 10 percent for the week, pushing its slump from a June peak above $115 to 45 percent.
Brent was last at $62.15 a barrel, down $1.53, while U.S. crude was off $1.80 at $58.15, its weakest since May 2009.
The plunge in oil prices battered currencies strongly linked to crude exports, with Norway's crown falling to an 11-year low against the U.S. dollar and the Russian ruble hitting another record low. The Canadian dollar slumped to a 5-1/2-year trough against the greenback.
"We're reaching a point where there's a risk of seeing corporate and sovereign defaults in energy-producing countries, which could revive global systemic risks," said Christophe Donay, head of strategy at Pictet, which has $441 billion in assets under management and custody.
Sovereign debt yields fell on growing concerns about disinflation as slowing European growth pushed down the yield of German and U.K. government debt to record lows, while making U.S. debt comparatively more attractive.
Bets increased that the European Central Bank will be forced to resort to further stimulus early next year.
German 10-year yields, the euro zone benchmark, dipped below 0.65 percent. The price of 10-year U.S. Treasuries rose 16/32 to yield 2.1218 percent.
"The sell-off in crude oil is really pressuring bond prices higher ... it's extremely deflationary," said Tom di Galoma, head of rates and credit trading at ED&F Man Capital Markets in New York.
U.S. stocks dipped, putting the benchmark S&P 500 on track to snap seven weeks of gains. Weak oil prices have increased worries about global demand and raised concerns about earnings for energy companies, with year-end tax selling adding pressure.
The S&P energy sector was down 1.6 percent and has shed more than 16 percent this year, making it the worst performing of the 10 major S&P sectors.
MSCI (NYSE: MSCI - news) 's all-country world equity index fell 0.9 percent to 410.82, while the FTSEurofirst 300 index of top European shares was down 2.1 percent at 1,328.90.
The Dow Jones industrial average fell 164.85 points, or 0.94 percent, to 17,431.49. The S&P 500 slid 16.33 points, or 0.8 percent, to 2,019 and the Nasdaq Composite lost 19.89 points, or 0.42 percent, to 4,688.27. (Reporting by Herbert Lash; Editing by James Dalgleish)
