World stock markets edged up while the euro softened against the dollar and yen yesterday following strong US economic data and on expectations of more rate cuts from the European Central Bank.
A slew of stronger-than-expected data pressured safe-haven assets, including gold, which slipped two per cent to a three-and-a-half-month low.
Platinum also fell after South Africa’s mining minister pledged to mediate in a long-running strike.
Wall Street’s S&P 500 hit a record high, led by gains in utility stocks. Data showed orders for long-lasting US manufactured goods unexpectedly rose in April while US single-family home prices also rose in March and beat expectations.
The day’s gains helped MSCI’s all-world share index move closer to its 2007 record high. The index was up 0.1 per cent.
Leading European markets higher, Britain’s FTSE 100 rose 0.4 per cent as a flurry of merger activity provided additional support. Intercontinental Hotels Group, buoyed by British media reports of bid interest from the United States, jumped 4.5 per cent and was the top performer on the pan-European FTSEurofirst 300, which was up 0.2 per cent.
However, investors kept a wary eye on Ukraine, which launched air strikes and a paratroop assault against pro-Russian rebels who seized an airport on Monday.
The escalation was tempered by a decisive win for billionaire Petro Poroshenko in Ukraine’s weekend presidential election, which many hope will stabilise the situation.
On Wall Street, the Dow Jones industrial average was up 50.89 points, or 0.31 per cent, at 16,657.16. The Standard & Poor’s 500 Index was up 7.96 points, or 0.42 per cent, at 1,908.49. The Nasdaq Composite Index was up 33.50 points, or 0.80 per cent, at 4,219.31.
Spot gold fell two per cent to its lowest since February 10 at $1,265.76 an ounce in early trade and was down 1.9 per cent at $1,268.10 an ounce, heading for its worst daily loss in two months. US gold futures dropped 1.8 per cent to $1,268.50 an ounce.
Gold has struggled to break consistently above the $1,300-per-ounce level for the past two weeks, indicating a lack of conviction by investors and speculators, analysts said.
Platinum fell 0.6 per cent to $1,460.74 an ounce after South Africa’s mining minister pledged to mediate in a strike now in its fifth month. The metal reached its highest since September at $1,493.90 last week.
Global oil prices also fell as traders took profits after a long holiday weekend. Brent was down 42 cents at $109.90 a barrel and US light crude oil was down 45 cents at $103.90.
The euro steadily lost ground against the greenback as investors returned from long holiday weekends and encountered better-than-expected economic data.
In New York trade, the euro fell 0.15 per cent to $1.3625 , plumbing Monday’s three-month low of $1.3614. Against the yen, the euro softened 0.14 per cent to 138.07.
The dollar index reversed course and gained ground against a basket of currencies to rise 0.03 per cent.
US Treasury prices inched lower, with the 30-year Treasury bonds down 2/32 in price to yield 3.400 per cent, compared with 3.397 per cent on Friday.