World stock prices softened yesterday on concerns about the political outlook in Europe and US econo-mic growth, and nervous investors piled into yen and low-risk US and German government bonds.
Oil prices declined on worries about global oversupply despite OPEC’s pact last week to extend its crude output cut until the first quarter of 2018.
Gold rose to a one-month high of $1,270 an ounce on safe-haven demand before it ran out of steam.
“There have been some softness in US economic data, and there are some less market-friendly policies in the US on the margin,” said Stephen Wood, chief market strategist with Russell Investments.
The MSCI world equity index, which tracks shares in 45 nations, fell 0.45 points, or 0.1 per cent, to 463.84.
On Wall Street, the Dow Jones Industrial Average fell 34.01 points, or 0.16 per cent, to 21,046.27, the S&P 500 lost 2.89 points, or 0.12 per cent, to 2,412.93 and the Nasdaq Composite dropped 2.76 points, or 0.04 per cent, to 6,207.44.
Recent US economic reports have supported a growing view that the world’s biggest economy is not recovering from an anemic first quarter as vigorously as some traders had thought.
Data released showed US consumer confidence fell in May and a gauge of core US inflation retreated on a year-over-year basis.
The lack of progress on tax cuts and other stimulus measures from Washington has also weighed on the outlook for company profits and broader economic activity, analysts said.
However, most Federal Reserve policymakers have not backed away from their expectations of two more rate increases by the end of 2017 as they see the US economy near full employment and are confident inflation would reach its two per cent goal.
In Europe, elections in Italy may now come as early as September, after the 5-Star Movement became the fourth big party to back a switch to a proportional electoral system. Greece’s debt problems also continued to simmer after it failed to reach a deal on its next installment of its bailout programme earlier this month.
Europe’s broad FTSEurofirst 300 index dropped 0.20 per cent at 1,533.88.
With jitters about the United States and Europe, the yen strengthened against the dollar and euro. It was up 0.2 per cent at 111.00 yen per dollar, and up 0.1 per cent at 124.09 yen per euro.
Safety bids lowered 10-year US Treasury yield to 2.229 per cent and pinned 10-year German yield at 0.302 per cent.
In commodities, Brent crude was last down $0.76, or 1.45 per cent, at $51.53 a barrel. US crude was last down $0.51, or 1.02 per cent, at $49.29 per barrel.
Spot gold prices were last down $3.84 or 0.30 per cent, to $1,262.76 an ounce.