© Reuters. FILE PHOTO: A passer-by wearing a protective face mask walks in front of a stock exchange sign amid the outbreak of coronavirus (COVID-19), in Tokyo
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By Tom Arnold and Swati Pandey
LONDEN / SYDNEY (Reuters) – Global equities fell from record highs on Friday as gloomy data reminded investors of the battle facing the economic recovery, and a rally sparking hopes for US stimulus by newly inaugurated President Joe Pray, limit it.
Sentiment in Europe was all the more cautious after Thursday’s European Central Bank meeting, in which the bank’s message was seen as more hawkish than expected.
Yields on Italian 10-year benchmark bonds hit the highest since early November over reports that Prime Minister Giuseppe Conte may be tempted by the prospect of a speedy election.
The euro was 0.8% weaker as investors consumed weaker flash PMI readings for January. The restrictions on the closure of the coronavirus pandemic have hit the dominant service industry of the bloc.
It decreased by 0.5% as the data shows that UK retailers struggled in December to recover from a partial closure of the coronavirus the previous month.
The MSCI World Equities Index, which tracks equities in nearly 50 countries, was 0.2% softer after three live sessions. E-Mini futures for the stumbled 0.53%.
MSCI’s broadest index of Asia-Pacific stocks outside Japan was 0.8% lower.
The risk-taking followed a period of relief after the transition to power in the United States, which culminated in Biden’s inauguration Wednesday and strong expectations that the U.S. stimulus will provide continued support to world assets.
“The fact that there would be an incentive in the US was known and the size of the package and the particular details of the high plan they were aiming for with the package were known a while ago,” said James Athey, investment director of Aberdeen Standard Investments.
“The reality of what can probably be achieved relatively quickly is not just supporting blindly buying cyclical assets. There are a lot more nuances and a lot more politics to go on before we get there.”
Republicans in the U.S. Congress have indicated that they are willing to work with Biden on the top priority of his government, a $ 1.9 billion U.S. fiscal stimulus plan, although some are against the price.
Democrats took control of the U.S. Senate on Wednesday, though they will still need Republican support to pass the program.
The Chinese composite stock index slipped 0.4%, while the CSI300 blue chip index rose 0.1%.
Travel plans were up for grabs in the northern cities of China for tens of millions of people. They were under some sort of lockdown amid concerns that undetected coronavirus infections could spread rapidly during the lunar New Year holiday, which is just a few weeks away.
China reported 103 COVID-19 cases on Friday.
In foreign exchange markets, the US dollar stood still after three consecutive days of losses, although it was still on track for its biggest weekly loss since mid-December. The currency was 90,118 flat on the day.
The Japanese yen fell $ 0.1 to $ 103.63.
Data from Japan showed overnight that factory activity shrank in January and that the service sector was more pessimistic about emergency measures to combat a COVID-19 revival sentiment.
The dollar’s recent slide was driven by investors plowing money into higher-yielding currencies on optimism about a rapid economic recovery led by the US stimulus.
In commodities, the oil price has been hit by concerns that new pandemic restrictions in China will limit fuel demand in the world’s largest oil importer. [O/R]
futures fell 1.2% to $ 55.41 a barrel. was 1.4% lower at $ 52.39 a barrel.
decreased by 0.4% to 1,862.3 ounces.