Global economic funk prompts defensive plays

Investors give European stocks wide berth as they seek refuge in sectors that show promise

IF global financial markets are telling a story, it's one set in a dystopia where chronic malaise keeps the economy on the verge of recession and companies can't raise prices because people can't afford to pay more.

One sign of the grim outlook is the collapse in oil prices to about US$45 a barrel, close to a six-year low, from US$108 in June. Other commodities - including copper, corn, iron ore, platinum and soybeans - are all trading near multi-year lows, too.

More evidence that investors expect a lingering slump can be seen in bonds; yields on American, European and Japanese government issues are near historical lows.

Five-year German bonds even have a negative yield; the deflation story is so...

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