Global stocks pared the worst of their losses after a selloff in Asia amid a broad risk-off mood. Treasuries rose with the dollar as investors’ focus turned to efforts to avert a US government shutdown .
The S&P 500 fluctuated as software companies advanced and automotive stocks declined. The MSCI World index pared losses of 0.4 percent, with the Stoxx Europe 600 Index little changed following the Nikkei’s worst rout in nine months. Oil declined past $57 a barrel after data showed US gasoline stockpiles expanded. The yen rose as European bonds rallied. Stocks from developing nations sank to a two-month low.
Global markets succumbed to a bout of profit taking this week, while US equities struggled to maintain gains, as traders move out of some of 2017’s biggest winners, including technology shares and emerging-market stocks.
The pause in the rally comes as investors assess US tax reform developments and wrangling over spending after a Republican plan to avoid a federal shutdown was thrown into disarray by infighting.
Investors are “locking in profits earlier than usual for the year and not opening any new positions,” said Andrew Clarke, director of trading at Mirabaud (Asia). “Eventually, as profit taking subsides, buying for the new year will appear as people look towards 2018.”
Elsewhere, sterling weakened
as efforts to rescue Brexit talks appeared to stumble. Australia’s
dollar dropped as slower-than- expected growth spurred traders to dial back their forecasts on interest-rate increases.
The European Commission College of Commissioners was expected to discuss Brexit on Wednesday and would likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship. The US faces a
partial government shutdown after money runs out on December 8 if Congress can’t agree on a spending bill by then. US employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report on Friday may also show a bump up in average hourly earnings. Canadian central bank expected to keep rates on hold on Wednesday while Brazil’s central bank is set to cut key rate to record of 7 percent.
The S&P 500 rose 0.1 percent as of 10:07 am in New York. The Stoxx Europe 600 Index fell 0.1 percent. The UK’s FTSE 100 Index gained 0.5 percent. Japan’s Nikkei 225 Stock Average decreased 2 percent to a three-week low. The MSCI Asia Pacific Index sank 1.3 percent to the lowest in almost six weeks. The MSCI Emerging Market Index dipped 1.7 percent.
The Bloomberg Dollar Spot Index gained 0.3 percent. The euro declined 0.3 percent to $1.1793. The British pound decreased 0.5 percent to $1.3372. The Japanese yen rose 0.3 percent to 112.27 per dollar. The yield on 10-year Treasuries decreased three basis points to 2.32 percent. Germany’s 10-year yield declined two basis points to 0.29 percent. Britain’s 10-year yield decreased five basis points to 1.21 percent, the lowest in four weeks.