A woman walks past an electronic stocks monitor showing the Hang Seng index in Hong Kong on Monday. (AFP)

May 22 (Reuters): Tumbling prices for copper, gold, oil and other commodities rattled global financial markets on Monday, sending equity indexes to their lowest levels in months and boosting safe-haven government bonds.

US down

US stocks fell on Monday, with the Nasdaq Composite index losing more than a per cent, as worries about inflation and higher interest rates pressured shares of economic bellwether companies such as Alcoa Inc.

A sell-off across equity and commodity markets in Europe and Asia added to the negative tone.

“Europe got crushed earlier this morning, Asia too, so I think stocks seem to be following the lead of Asia and Europe,” said Phil Orlando, chief portfolio manager at Federated Investors in New York.

The Dow Jones industrial average was down 51.79 points, or 0.46 per cent, at 11092.27. The Standard & Poor's 500 Index was down 8.15 points, or 0.64 per cent, at 1,258.88. The Nasdaq Composite Index was down 25.19 points, or 1.15 per cent, at 2168.69.

UK stocks

UK stocks suffered another steep decline, wiping nearly ?31 billion off the FTSE 100's value and taking the index to its lowest close since mid-December, with resource stocks led by steelmaker Corus and miner Xstrata feeling the brunt of the selling pressure.

The FTSE 100 ended down 124.7 points, or 2.2 per cent, at 5,532.7 ? erasing ?30.8 billion from the worth of UK blue-chip stocks and taking the index to its lowest close since December 16. Turnover was a heavy 3.5 billion shares, and the drop marked a finish below the FTSE's 200-day moving average, a bearish technical sign.

Europe next

European shares fell 3 per cent and dipped into negative territory for 2006, hit by weakness in oil and mining issues as commodity prices fell.

By midsession, the pan-European FTSEurofirst index of 300 leading shares was down 3.0 per cent at 1,267.7 points, the day's low and falling into negative territory for the year-to-date.

The losses wiped out the market's more than 10 per cent rise from a near-five year high of 1,407.5 points struck on May 11.

Asian market

Asian stocks fell across the board as worries about inflation persisted and falling commodity prices pulled down resource-related shares.

The dollar edged higher, building on gains made last week, as investors switched out of precious and base metals, gold and oil, forcing commodities down. Gold fell more than 2 per cent to its lowest level in nearly four weeks on Monday.

Japan’s Nikkei share average, which has fallen for two straight weeks, fell 1.84 percent to close below 16000 for the first time in two months, while shares elsewhere in Asia measured by MSCI were down over 3 per cent.

Kenichi Azuma, equity strategist at Cosmo Securities, said lingering concerns in Japan about possible hikes in US interest rates and their impact on US consumption weighed on the market.

Seoul’s benchmark KOSPI index was among the biggest losers in Asia, dropping 2.46 per cent to its lowest close in seven weeks, while Hong Kong’s Hang Seng index was down 2.5 per cent.