Global stocks edged down following new outbreaks of COVID-19 in Asia
- Banks and tech stocks take S&P 500 to new heights
- Investors await US employment data due Friday
- Delta variant puts pressure on Asian stocks
- Gold vanishes at 11-week dollar low, Fed hawkish
LONDON / SYDNEY, June 29 (Reuters) – Global stocks edged down on Tuesday, as new coronavirus outbreaks in Asia rivaled strong U.S. consumer confidence and investors questioned whether the Federal Reserve would speed up its timeline to put an end to an accommodating monetary policy.
MSCI’s All Country World Index, which tracks stocks from 50 countries, fell 0.14% as declines in Asian stocks hit new highs in European and US markets.
The S&P 500 hit a record high for the fourth session in a row, helped by tech and banking stocks, and a government survey that showed U.S. consumer confidence in June hit its highest level since the start of the pandemic.
European stocks measured by the pan-European STOXX 600 index rose 0.31%, helped by a jump in industrials, financials and mining stocks which should benefit from the economic improvements.
However, MSCI’s largest Asia-Pacific stock index outside of Japan closed 0.55% lower, while Japan’s Nikkei lost 0.81% as some countries reimposed lockdowns. to contain the spread of the Delta variant of COVID-19.
Chinese stocks lost 0.92% as investors turned profit after a rally on the economy’s strong rebound after the pandemic.
Fears over the highly contagious Delta variant are shaking sentiment in already-on-the-skin markets after the Fed appeared to take a hawkish tilt this month.
Indonesia is grappling with record cases, Malaysia is extending its lockdown, and Thailand has announced new restrictions. Spain and Portugal imposed travel restrictions on unvaccinated British travelers.
“The outlook for politics in general and the US in particular, both fiscal and monetary, is the most relevant factor in the mind of the market right now rather than the spread of the Delta variant,” said James Athey, Director of Investments at Aberdeen Standard Investments.
“It may well turn out to be naive or complacent.”
Markets will watch the US jobs report for June on Friday, with economists polled by Reuters expecting a gain of 690,000 jobs this month, up from 559,000 in May.
Richmond Federal Reserve Chairman Thomas Barkin said on Monday that the US central bank had made “further substantial progress” towards its inflation target in order to start reducing its asset purchases.
These comments and anticipation of a strong jobs report lead investors to believe that the Fed will move forward on its interest rate hike schedule.
“Inflation is already much higher than what the Fed had anticipated, so it is really the pace of improvement in the labor market which outpaces all other indicators in terms of when the Fed will feel comfortable. to signal the start of the reduction, ”said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.
On Wall Street, the Dow Jones Industrial Average lost 6.68 points, or 0.02%, the S&P 500 lost 3.05 points, or 0.07%, and the Nasdaq Composite added 3.44 points, or 0.02%.
The German DAX added 1%, rising after data showed a slowdown in annual consumer price inflation in Germany in June. The 2.1% reading was still above the European Central Bank’s target of nearly but below 2%.
Yields on benchmark 10-year U.S. Treasuries last fell 1/32, to yield 1.4799%, from 1.478%.
The yield on German 10-year bonds rose 1 basis point to -0.173%.
The US dollar hit a one-week high. The dollar index, which tracks the greenback against a basket of six currencies, rose 0.192%, with the euro down 0.2% to $ 1.19.
Sterling was last at $ 1.3848, down 0.25%. The Australian dollar, seen as a liquid indicator of risk appetite, lost 0.70% against the greenback at $ 0.751.
Oil prices rose as hopes for a recovery in demand persisted despite further outbreaks of the Delta variant.
Brent crude futures were up 8 cents, or 0.11%, and US crude was up 7 cents, or 0.10%.
Spot gold fell 0.8% to $ 1,764.92 an ounce. US gold futures fell 0.97% to $ 1,762.60 an ounce.
Reporting by Tom Arnold in London and Paulina Duran in Sydney; Editing by Shri Navaratnam and Emelia Sithole-Matarise
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