Stocks fall, oil slips as global risk rally stalls

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In this news, we discuss the Stocks fall, oil slips as global risk rally stalls

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NEW YORK (Reuters) – Global equity benchmarks slipped from record highs and oil prices fell on Friday as weaker economic data in Japan and Europe and fears that the US stimulus package New US President Joe Biden may face Republican opposition curbed a week-long rally in risk assets.

Sentiment in Europe was already more cautious after Thursday’s European Central Bank meeting, in which the bank’s message was seen as more hawkish than expected.

The Euro STOXX 600 was 1% weaker, heading for its worst daily performance of the year so far, as investors digested weaker flash PMI readings for January. Lockdown restrictions to contain the coronavirus pandemic have hit the bloc’s dominant service sector.

The FTSE 100 index slipped 0.7%, with data showing UK retailers struggled to recover in December from a partial coronavirus lockdown the month before.

Republicans in the U.S. Congress have indicated they are prepared to work with Biden on his administration’s top priority, a $ 1.9 trillion U.S. fiscal stimulus package, though some are opposed to the price.

Democrats took control of the US Senate on Wednesday, though they still need Republican support to pass the plan.

“The fact that there would be a US relaunch was well known and the size of the package and the very high level details of what they are targeting with the package were well known some time ago,” said James Athey, Director of Investments at Aberdeen Standard Investments.

“The realities of what is likely to be achievable relatively quickly do not favor the blind buying of cyclical assets. There are a lot more nuances and a lot more politics to be done before we get there.

The MSCI indicator of equities across the world lost 0.59% after sharp declines in Asia.

In morning trading on Wall Street, the Dow Jones Industrial Average fell 180.55 points, or 0.58%, to 30,995.46, the S&P 500 lost 16.8 points, or 0.44%, to 3836 , 27 and the Nasdaq Composite fell 37.58 points, or 0.28%, to 13,493.34. .

The risk mood followed a period of relief following the U.S. transition of power, culminating with Biden’s inauguration on Wednesday, and high expectations that the U.S. stimulus will provide continued support to global assets.

In currency markets, the US dollar gained after three straight days of losses, although it was still on track for its biggest weekly loss since mid-December. The dollar index rose 0.193%, with the euro down 0.04% to $ 1.2157.

The recent decline in the dollar was led by investors investing money in higher yielding currencies, optimistic about a rapid economic recovery led by the US stimulus.

Benchmark 10-year notes last rose 5/32 to price 1.0906%, up from 1.107% Thursday night.

Data from Japan overnight showed factory activity entered into contraction in January and the service sector was more pessimistic as emergency measures to tackle a COVID-19 resurgence hit the feeling.

In the commodities sector, oil prices have been weighed down by fears that new pandemic restrictions in China will reduce fuel demand from the world’s largest oil importer. [O/R]

US crude was down 1.96% to $ 52.09 a barrel and Brent was at $ 54.76, down 2.39% on the day.

Reporting by David Randall; edited by Philippa Fletcher

Original © Thomson Reuters

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