LONDON (AP) — Stock markets around the world suffered broad-based losses Thursday after the U.S. Federal Reserve chief suggested that share prices are generally overvalued.
KEEPING SCORE: France's CAC 40 lost 0.9 percent to 4,938 while Germany's DAX fell 0.4 percent to 11,302. British shares underperformed as voters headed to the polls in what looks like it will be the most uncertain election outcome in decades. The FTSE 100 index was down 1.2 percent to 6,852. U.S. shares were set for losses at the open, with S&P 500 futures and Dow futures down 0.4 percent.
YELLEN SPEECH: Thursday's retreat follows comments from Federal Reserve Chair Janet Yellen suggesting that stocks are generally overvalued. Yellen said market valuations were generally "quite high" in response to a question about risks to financial stability at a conference in Washington. Some market experts think the Fed will have to increase its short-term rate relatively soon to fight inflation.
ANALYST TAKE: "Yellen wasn't trying to spook the stock market, but was reminding traders that interest rates will not remain rock bottom forever," said David Madden, market analyst at IG. "The Fed is fully aware that ultra-low interest rates have been a huge factor behind U.S. equities hitting all-time highs this year, and the last thing the U.S. central bank wants is a crash when rates start to rise."
UK ELECTION: Britain's general election also added a dose of uncertainty to markets. The election is not expected to deliver a majority for either of the big two political parties, the Conservatives or Labour. Days, if not weeks, of horse trading and uncertainty are anticipated and that could impact on British financial assets, notably the pound. Ahead of the results, which are expected to start pouring in in the early hours of Friday, the pound was relatively steady, trading 0.2 percent lower at $1.5210.
GREEK HOPES: Greece also remains in the spotlight as the country's government tries to convince creditors the merits of its economic reforms so it can get its hands on much-needed bailout cash. Greece has a repayment of around 770 million euros to make to the International Monetary Fund next Tuesday. There are hopes that some sort of progress will be announced on Monday at a meeting of eurozone finance ministers on Monday.
ASIA'S DAY: Japan's benchmark Nikkei 225 closed down 1.2 percent at 19,291.99. It was the first day of trading for the week after the Tokyo market was closed for national holidays. Australia's S&P/ASX 200 lost 0.8 percent to 5,645.70. South Korea's Kospi fell 0.7 percent to 2,091.00. Hong Kong Hang Seng was 1.3 percent lower at 27,289.97 and China's Shanghai Composite Index shed 2.8 percent to 4,112.21.
ENERGY: U.S. crude was up 13 cents to $61.08 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, was up 37 cents to $68.14 in London.
CURRENCIES: The dollar fell 0.3 percent to 119.15 yen while the euro slipped 0.4 percent to $1.1302.