Paris - Investor appetite
for risk abated as European shares dropped on concern the longest rally
since July 2015 went too far, while havens including the yen, bonds and
An index of Europe’s 600 biggest shares fell for the first time in eight days. Nestle SA lost the most since November after
saying it will target lower growth. The dollar depreciated against most
G10 peers even as traders raised bets for higher US interest rates in light of faster-than-expected
inflation. Gold climbed and Treasuries advanced after falling for five days.
“Following the sharp rally we’ve seen in cyclical shares since early
November, investors are now getting reluctant to just buy whole sectors
such as mining and banks, and are starting to pick the best stocks
within the sectors,”
Stephane Ekolo, chief European strategist at Market Securities in
London. “These stocks will prove more resilient when the selloff comes.”
jumped in value by more than $5trn since President Donald Trump’s
November victory, spurred largely on bets his pledges to boost spending
would activate growth and inflation.
The relative strength index of the
MSCI’s broadest global equity gauge is signalling to some traders a
correction is now due, while odds for a US rate hike in March are
on the rise.
What’s ahead for the markets:
Next up for US economic reports will be data on housing starts, due on
Thursday.US home construction starts were probably little changed in
January after a larger-than-projected advance a month earlier, a
Commerce Department report is forecast to show.
The Group of 20 foreign ministers began a two-day meeting as part of
Germany’s rotating chairmanship. Rex Tillerson is expected to make his
first European trip as secretary of state.
Here are the main moves in markets:
Stocks Europe 600
Index fell 0.3% as of 14:17, the first decline
since February 6, with only technology, health care, leisure and
telecommunications shares eking out gains.
The MSCI All Country World Index climbed 0.2%. Nestle, the
world’s largest foodmaker, fell 2.2%.
Futures on the S&P 500 decreased 0.2% after the benchmark
index rose 0.5% on Wednesday.
The MSCI Asia Pacific Index added 0.5%, though more stocks fell
than rose. Chinese shares traded in Hong Kong extended a rally and the
Hang Seng climbed to the highest since August 2015.
The yen appreciated 0.5% to ¥113.61/$, the
best performance in a basket of 17 peers.
Bloomberg Dollar Spot Index lost 0.2%, matching the decline on Wednesday.
rand weakened 0.5%.
yield on 10-year Treasuries dropped two basis points to 2.47% after increasing for a fifth day on Wednesday.
Demand climbed at an auction of French debt, although bonds declined after the sale as investors focused on weak pricing.
Oil traded near $53 a barrel after a government report on Wednesday
showed US crude inventories rose to the highest levels in weekly data
going back to 1982.
Gold climbed for a third day, gaining 0.3% to $1 237.90 an ounce.
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