Global markets fall for 7th day

Global stock markets traded lower for the seventh day Tuesday,their longest losing streak since January,with the Canadian dollar and commodities falling as worries mounted about a renewed European debt crisis and inflation in Asia.

The S&P/TSX composite index closed down133.2 points, or one per cent, to 12,602.2.

In New York, the Dow Jones industrial average lost 178.47, or 1.6 per cent, to 11,023.5, after earlier dipping below 11,000 for the first time in nearly a month.

The S&P 500 index was down 19.41, or 1.6 per cent, to 1,178.34, while the Nasdaq composite is down 43.98, or 1.75 per cent, at 2,469.84.

The Canadian dollar shed more than a cent, closingat 97.83 cents US, down 1.29 of a cent, as traders bought U.S. dollars in order to move into the perceived safety of American government debt.

"The Canadian dollar ranks as one of the weaker-performing currencies overnight as investors shun risk broadly," TD Bank currency strategists Shaun Osborne and Jacqui Douglas said in a note to clients.

European markets ended lower as finance ministers met in Brussels to decide whether Ireland needs a bailout similar to the one given to Greece.

"It's been simmering for a while," Scott Brown, chief economist at Raymond James & Associates, said of the European debt problems. "Now it's coming to a complete boil."

Brown said Ireland is more troublesome for Europe than Greece because more of Ireland's debt is held by big banks, particularly ones in Great Britain.

'Canadian dollar strength or outperformance would be hard to justify.' Sacha Tihanyi, Scotiabank currency strategist

A default by Ireland could be another blow to banks that have only recently recovered from the global credit crisis.

Britain's FTSE 100 fell 2.2 per cent, Germany's DAX index dropped 1.9 per cent, and France's CAC-40 fell 2.7 per cent.

And Asian markets finished down as South Korea raised a key interest rate.

There is speculation China will do the same in the coming days, which would dampen its demand for commodities, something that wouldaffect Canada's exports.

The December crude contract on the New York Mercantile Exchange was down $2.52, or three per cent, at $82.34 USa barrelas the month's gold contract in New York was lower by $30.10 to $1,338.40 US an ounce.

"Canadian dollar strength or outperformance would be hard to justify in such an environment," Scotiabank currency strategist Sacha Tihanyi told Bloomberg.

The Canadian dollar has fallen steadily since touching parity with the U.S. dollar during the week of Nov. 5.

Japan's Nikkei stock average fell 0.3 per cent, while Hong Kong's Hang Seng fell 1.4 per cent.