World shares fell on Tuesday as concern that the recent stock rally has been overdone grew after the OECD cut its global economic forecasts, while doubt over when the Federal Reserve may trim its stimulus supported the dollar.
In its latest snapshot of economic activity, the Paris-based Organisation for Economic Cooperation and Development (OECD) cut its 2014 forecast for global economic growth to 3.6 percent from the 4.0 percent it saw in May.
Equity investors are concerned that the recent rally, driven by the loose policies of major central banks, has far outpaced the underlying economic improvement, leaving share prices ripe for a sharp fall.
MSCI's world equity index, tracking shares in 45 countries, followed the tone set by Wall Street and edged down 0.2 percent, backing away from Monday's 6-year peak.
In Europe, the worries about high share values amid a generally weak quarterly earnings season and signs of a fragile economic recovery left the broad FTSEurofirst 300 index was 0.6 percent lower by late morning, off from a 5-year peak.
Pan-European multiples are close to multi-year highs.
Source: Reuters
