Global equity prices slipped for a third straight day yesterday, pressured by growing nervousness about central bank policy and spiking world bond yields, while the dollar firmed as investors turned their focus to tomorrow’s US payrolls data.
Oil edged higher on light short-covering after falling to lows last seen in April the previous day.
Global equity prices, weighed down by a sharp drop in Japanese stocks on surging Japanese government bond yields and a strengthening yen, found little support from Wall Street.
MSCI’s world stocks index , which tracks shares in 45 nations, was down 0.37 per cent.
“The central banking issue is more of a factor of everybody trying to stimulate their economies, and how much more can you do?,” said Scott Fullman, chief strategist at Revere Securities LLC.
The recent outbreak of weaker US data has further pushed back expectations for when the Federal Reserve might raise benchmark US interest rates.
UK services sector data yesterday showed Britain’s economy is shrinking at the fastest pace since 2009, upping the ante on the Bank of England not to under-deliver at its policy meeting today.
The recent drop in oil prices and concerns about the strength of European banks, were among some of the other factors that have halted the rally in equity prices, Mr Fullman said.
US stocks were little changed in choppy trading as declines in healthcare and consumer stocks were offset by gains in energy and financials.
The Dow Jones industrial average rose 22.02 points, or 0.12 per cent, to 18,335.79, the S&P 500 gained 2.02 points, or 0.09 per cent, to 2,159.05 and the Nasdaq Composite added 4.78 points, or 0.09 per cent, to 5,142.52.
European stocks were steady as a rebound in the shares of the region’s struggling banks offset weaker auto stocks.
Europe’s broad FTSEurofirst 300 index was up 0.12 per cent at 1,322.84.
The dollar edged higher, recovering from six-week lows hit the previous session, as investors squared positions ahead of Friday’s US non-farm payrolls report, data that should help determine the timing of the next US rate hike.
The greenback, which took a big hit after last week’s disappointing US growth data, got a minor boost yesterday from strong hiring data from the private sector. The dollar index, which tracks the greenback against six major currencies, was up 0.36 per cent to 95.410.
Oil prices jumped about two per cent, with US crude futures returning above $40 a barrel, after the US government reported a larger-than-expected gasoline drawdown that offset a surprise build in crude stockpiles.
Brent crude was up 2.2 per cent at $42.71 a barrel, while US crude was up 2.4 per cent at $40.46.