Major stock markets around the globe fell yesterday but were on track to book moderate gains for May, while the sterling fell as conflicting poll results stoked worries whether the ruling Conservatives could lose seats in next week’s UK general election.
MSCI’s global equity index , which tracks 45 stock markets, fell nearly 0.1 per cent yesterday, paring its month-to-date gain to 1.8 per cent.
The index was on course for seven months of gains, which would be its longest monthly winning streak in over a decade.
The diminished appeal of stocks yesterday stoked safe-haven bids for gold and low-risk US and German government bonds.
Oil prices declined to a three-week low as news of a rebound in Libyan production exacerbated worries about a global oversupply despite OPEC’s pact to extend output cuts last week.
“Risk appetite is pretty light today,” said Ellis Phifer, senior market strategist at Raymond James in Memphis, Tennessee.
In late US morning trade, the Dow Jones Industrial Average fell 18.21 points, or 0.09 per cent, to 21,011.26, the S&P 500 lost 2.35 points, or 0.10 per cent, to 2,410.56 and the Nasdaq Composite dropped 12.05 points, or 0.19 per cent, to 6,191.14. On the other hand, Europe’s broad FTSEurofirst 300 index edged up 0.25 per cent, at 1,537.42 after a sharp fall in euro zone inflation led investors to believe the European Central Bank will not be quite as hawkish at its policy meeting next week than had originally been expected.
Benchmark 10-year Treasury note yields were down 1 basis point at 2.203 per cent, a near two-week low, while 10-year German Bund yields hit 0.286 per cent, the lowest in over five weeks. The biggest mover in currencies was sterling, which shed as much as 0.5 percent after a YouGov poll showed the ruling Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats in a national election on June 8.
Sterling fell to a six-week low of $1.2770 before recovering some ground to $1.2838. It also slipped to 0.8749 pound per euro , near Friday’s eight-week low of 0.8750.
The dollar fell 0.3 per cent against a basket of currencies following weaker-than-forecast data on pending home sales.
Meanwhile, the yuan jumped to its strongest in more than 6 months on bets the Chinese central bank is now less inclined to allow the currency to weaken markedly against the greenback.
In commodities, Brent crude was last down $1.94, or 3.74 per cent, at $49.90 a barrel. US crude was last down $1.83, or 3.69 percent, at $47.83 per barrel.