Global equity markets reached a two-year low yesterday as the outlook for raw materials prices and emerging markets remained bleak, while US biotech shares attempted to stabilise after a recent sell-off.

Commodity prices edged up but held near multi-year lows on concern over an economic slowdown in major raw material consumer China. US stocks turned higher in a choppy session, as biotechs were volatile following a seven-session losing streak.

The S&P 500 dropped 2.6 per cent in the previous session for its fifth straight loss, moving closer to August lows that analysts see as a key support level.

Since the Federal Reserve held US interest rates in check on September 17, markets have been kept off balance on the timing of a rate hike.

Fed officials gave mixed messages on Monday and investors were looking to a speech from Fed Chair Janet Yellen today for more clarity, with a key US payrolls report also due on Friday.

Mining and trading company Glencore, whose shares fell by almost a third on Monday on investor concern over its debt levels, bounced up 16.9 per cent in London but only after its Hong Kong-listed shares fell 29 per cent.

Copper steadied after hitting a one-month low. It last traded at $4,973.50 a tonne, up 0.2 per cent on the day but within reach of a 6-1/2-year low below $4,855.

Platinum fell to a low of $894 an ounce, its lowest since December 2008, on fears that the emissions scandal surrounding German carmaker Volkswagen could hit demand from the auto sector. It last stood at $912.74, down 0.4 per cent.

The pan-European FTSEurofirst 300 index closed down 0.6 per cent, recovering from a steeper fall led by biotech shares.

US biotechs reversed initial declines to show a gain of 1.6 per cent. The Nasdaq Biotech Index fell nearly 20 per cent over the previous seven sessions on concerns about government intervention in drug pricing.

MSCI’s all-country share index was down 0.5 per cent after touching a two-year low.

The flash reading of annual eurozone inflation is due today. A slip into negative inflation would fuel speculation about further European Central Bank stimulus, six months after the eurozone’s central bank launched a massive asset purchase programme.

The US 10-year Treasury note rose 10/32 in price to yield 2.0596 per cent. The Dow Jones industrial average rose 27.93 points, or 0.17 per cent, to 16,029.82, the S&P 500 gained 5.73 points, or 0.3 per cent, to 1,887.5 and the Nasdaq Composite added 6.46 points, or 0.14 per cent, to 4,550.43.

Brent crude oil rebounded by $1.16 a barrel to $48.50 while US crude gained 2.6 per cent to $45.60.

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