LONDON / TOKYO (Reuters) – Global equities dipped on Friday after loud Chinese economic data and concerns about a slowdown in U.S. fiscal stimulus discouraged some investors from taking risks.
FILE PHOTO: A pedestrian in the offices of the London Stock Exchange in the City of London, UK, 29 December 2017. REUTERS / Toby Melville
European stocks were also dragged down by a hit for travel stocks after Britain added more European countries to its quarantine list.
The pan-European STOXX 600 was 0.7% down, although on course to win for a second straight week.
MSCI’s world index was 0.2% lower, drifting further from all highs in February. The index is still up close to 50% from the March trough in the wake of the COVID-19 pandemic.
“The rally was extended too long and most of the good news is already in price,” said Francois Savary, chief investor at Swiss wealth manager Prime Partners.
“There are no more positive than expected revenues and we are going back to the macro background and checking the data regularly to see if the recovery is sustainable. Markets price a lot of good news and we will enter a period of volatility with the upcoming US elections. ”
Thanks to preliminary European employment and GDP numbers at 0900 GMT and US retail sales figures at 1230 GMT will be seen for signs of divergence between US and European recovery.
Data showing a slower-than-expected rise in Chinese industrial production and a surprising drop in retail sales put Asian stocks in the background.
MSCI’s broadest index of shares in Asia-Pacific outside Japan fell 0.1%, although shares in Japan increased 0.2%.
Chinese shares increased 1.5% in choppy trading, with data suggesting that domestic demand is still struggling following the outbreak of coronavirus.
E-mini futures for the S&P 500 were flat.
The benchmark German 10-year Bund yield fell to -0.42% after rising for three sessions and following a six-week peak in early trading.
Yields on U.S. treasuries continued to rise after an auction of 30-year bonds on Thursday met weak demand.
Further equity gains are likely to be limited as investors wait for progress in negotiations on U.S. economic stimulus, which is necessary to prevent an emerging recovery in the world’s largest economy from slipping in reverse.
Some traders stuck to the sidelines before a meeting between US and Chinese officials on Saturday discussed their Phase 1 trade.
Spotgold fell 0.35 to $ 1,947.43 as high-yield U.S. Treasury bills prompted investors to re-evaluate their positions. Bullion has declined more than 4% so far this week, its largest weekly percentage since early March.
Data on Thursday showed the number of Americans looking for unemployment benefits to fall below one million for the first time since the pandemic began, but were not enough to change economists’ perceptions that the job market is false.
Revenues from the US Treasury also supported the US dollar, which remained stable at 106.90 yen and $ 1.1812 against the euro.
The dollar index went to an eighth consecutive week of loss, its longest weekly losing streak since June 2010.
Oil margins further below $ 45 per barrel at noon worried supply recovery and increasing supply. Brent crude fell 0.7% to $ 44.67, reversing this week’s gains. US West Texas Intermediate slipped 0.6% to $ 41.99. [O/R]
Additional reporting by Lawrence Delevingne in Boston; Edited by Kirsten Donovan
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