Europe stocks drop after Asia gains, bonds mixed

London - European stocks struggled to follow Asian peers higher as the euro strengthened at the end of a tumultuous week. The dollar declined against most major peers and Treasury yields dropped.

The Stoxx Europe 600 Index fluctuated before turning lower amid mixed national gauges and as the common currency climbed for the first time in three days. European bonds nudged into the red.

The dollar weakened and Treasuries edged higher as a probe into Russian influence on the 2016 US election was said to have deepened. Earlier in Asia, shares in Japan ended fractionally higher as the yen jumped to the strongest in four-weeks.

Equities in Hong Kong and Australia rose, while Chinese stocks traded in Shanghai fell. Indian stocks and the currency advanced after Moody’s Investors Service raised the nation’s credit rating.

As Washington took one step closer to tax reform and China’s central bank injected the most cash since January into its financial system this week, investors have been trying to decide if resilient global growth and strong earnings forecasts warrant sticking it out in equities.

Lofty valuations contributed to fund managers paring back some exposure after global shares reached record highs earlier this month.

In the US, Special Counsel Robert Mueller was said to have served US President Donald Trump’s election campaign a subpoena in mid-October, in the latest sign that his criminal investigation is aggressively pursuing links between campaign officials and Russia.

Meanwhile, the chances that firms will get a tax break appeared to improve after Republican Senator Ron Johnson, who had declared his opposition to the Senate’s tax plan, said he is optimistic his concerns can be addressed. The House passed its version of the bill on Thursday.

Elsewhere, Bitcoin hit another record high just days after a plunge of as much as 29%, though it later reversed its gains. Commodities bounced after the recent selloff.

Here are some key events:

European Central Bank President Mario Draghi will speak in Frankfurt on Friday. Here’s a link to the big events coming up next week.

And these are the main moves in markets:

Stocks

The Stoxx Europe 600 Index fell 0.1% as of 8:39am London time. The MSCI World Index of developed countries gained less than 0.05% to the highest in a week.

The MSCI Asia Pacific Index jumped 0.4% to the highest in a week. Japan’s Nikkei 225 Stock Average climbed 0.2% to the highest in a week. The MSCI Emerging Market Index jumped 0.6% to the highest in more than a week.

The UK's FTSE 100 Index dipped 0.2% to the lowest in seven weeks.

Currencies

The Bloomberg Dollar Spot Index declined 0.1% to 1 172.41, the lowest in four weeks. The euro advanced 0.2% to $1.1795. The British pound climbed 0.3% to $1.3238, the strongest in more than two weeks.

The Japanese yen increased 0.4% to 112.58 per dollar, the strongest in more than four weeks.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.36%. Germany’s 10-year yield gained one basis point to 0.39%, the biggest gain in a week. Britain’s 10-year yield climbed two basis points to 1.324%.

Commodities

West Texas Intermediate crude gained 0.5% to $55.42 a barrel, the biggest rise in more than a week. Gold gained 0.3% to $1 282.00 an ounce, the highest in more than a week on the largest rise in more than a week.