Commodities dragged into global equity selloff

LONDON: Commodities from crude oil to metals and iron ore dropped as the global equity rout and surge in market volatility spurred investors to pare risk, cutting positions in raw materials even as banks and analysts stood by the asset class given the backdrop of solid global growth.

Brent crude slid as much as 1.2 percent to $66.82 a barrel, heading for a third daily drop and the longest losing run since November. On the London Metal Exchange, copper sank as much as 2 percent to $7,025 a metric ton as zinc, lead and nickel declined. Iron ore futures fell 1.2 percent in Singapore.

Global equity markets are in retreat after Wall Street losses that began in the final session of last week worsened, with the Dow Jones Industrial Average posting its biggest intraday point drop in history. The selloff -- triggered in part by an initial rise in bond yields and concerns about the pace at which the Federal Reserve will raise interest rates -- is spilling into commodities, which rallied in late January to the highest level since 2015. Still, Citigroup Inc. said now's the time for investors to add positions in metals.

"Clearly there is a risk off tone in the markets that will weigh on the sector," said Daniel Hynes, a senior commodities strategist at Australia & New Zealand Banking Group. "But there is no fundamental reason for this selloff to change our view of commodity markets." Miners and energy companies fell as share benchmarks spiraled downward. In the U.S., Exxon Mobil Corp. and Chevron Corp. were among the worst performers in the Dow. In Sydney, BHP Billiton Ltd., the world's largest mining company, dropped 2.7 percent as Rio Tinto Group traded lower.