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World shares steady in holiday lull

Dec 24 2012 00:50

London - World stock, commodity and currency markets were steady on Monday, as the holiday lull set in across markets and offset tensions over the US budget dispute.

With only UK, French, Dutch and Spanish stock markets open in Europe and trading shortened ahead of Christmas celebrations, the FTSEurofirst300 opened almost flat at 1138.35 points to leave the MSCI index of global stocks virtually unchanged at 339.87.

Activity in other assets was also subdued, with spot gold steadying as investors took to the sidelines, while Brent oil eased 0.3% to $108.63.

Financial markets are also in limbo over $600bn of US spending cuts and tax hikes that kick in next month and threaten to hurt the economy. Lawmakers and President Barack Obama have abandoned talks to prevent this "fiscal cliff" until after Christmas.

"It's all about the US fiscal cliff issue," said Victor Shum, managing director at IHS Purvin & Gertz.

"The chances are that we will get a deal between the White House and the Republicans, but the fact that (House of Representatives speaker John) Boehner failed to get members to support his plan is worrying."

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1% in thin trading after falling to a near two-week low on Friday.

Japanese financial markets are closed for a public holiday and will resume trading on Tuesday. Most European bond markets were also shut.

In the currency market, the dollar eased 0.1% versus a basket of major currencies, while the euro was steady at around $1.3196.

The yen, however, neared a 20-month low versus the dollar after incoming premier Shinzo Abe renewed pressure over the weekend on the Bank of Japan to adopt a 2% inflation target. 

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