London - European stocks drifted lower for the first time in three days as gains for mining and energy shares struggled to offset a broader mood of caution. Gold was poised to snap its six-day losing streak amid a wider commodity bounce.
The Stoxx Europe 600 Index slipped following a raft of corporate results. Companies including Telefonica, UniCredit and Maersk reported good earnings, but the gauge this week climbed to near the highest on record and trading patterns indicate it may be due a pause.
Oil rose after posting the biggest advance this year on Wednesday as US crude stockpiles fell by more than twice what had been forecast.
While company earnings and US data are painting a picture of robust global growth and political risk has eased following France’s presidential election, investors are showing a lack of conviction as global equities trade at record-high levels and volatility evaporates.
The path for interest rates will remain a major focus, with the Bank of England meeting today amid growing bets for a Fed increase in June and talk of tapering by the European Central Bank.
“Investors are trying to make sense of contradictory forces,” said Ben Kumar, a London-based investment manager at Seven Investment Management, which oversees about £10bn. “Everyone’s quite optimistic and companies are making lots of money and this is all good stuff, and they start thinking about Mario Draghi and the taper and how much that will hurt.”
Here are the key events this week:
New York Fed President William Dudley will give a speech in Mumbai, a chance for investors to further assess US monetary policy. The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.
US April retail and CPI figures are on Friday. March industrial production data the same day could prompt a revision to the first reading of eurozone GDP growth. Germany’s preliminary growth figure for the first quarter is also on Friday.
And here are the main moves:
Asia
Asian equity markets climbed to multi-year highs, with South Korea reaching a fresh record while the Nikkei 225 Stock Average approached the 20 000 level. Chinese shares erased earlier losses. The kiwi fell as much as 1.8% after New Zealand’s central bank chief downplayed rising price expectations.
Stocks
The Stoxx Europe 600 fell 0.2% as of 10:52, after gaining 0.2% on Wednesday to the highest level since August 2015. Futures on the S&P 500 slipped 0.1% after the underlying gauge rose 0.1% on Wednesday to an all-time high.
Currencies
The euro added 0.1% to $1.0882 as the Bloomberg Dollar Spot Index fell less than 0.1%. The kiwi fell 1.3% to 68.49 US cents. The Reserve Bank of New Zealand kept its benchmark rate unchanged and said it will keep rates there for an extended period in expectation that inflation will slow. The Canadian dollar dropped 0.4% after Moody’s Investors Service downgraded six Canadian banks.
Bonds
The yield on 10-year Treasury notes fell one basis point to 2.40% after rising for the past three sessions. German benchmark yields rose three five basis points to 0.45%.
Commodities
West Texas oil rose 1.3% to $47.93 a barrel after jumping more than 3% on Wednesday. Gold added 0.2% to $1 221.53 following the longest losing streak since October. Iron ore on SGX AsiaClear in Singapore fell as much as 4.5% to $59 a ton, the lowest since October amid a clampdown on leverage in China, the top consumer, and expanding global supply.
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