RPT-GLOBAL MARKETS-Global equities drop record high, dollar closes on economy worries
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* European equities down 1%, S&P futures down 0.34%
* Asian equities down 0.68%
* Oil gains after restarting production in the Gulf of Mexico
LONDON / HONG KONG, Sept. 8 (Reuters) – Global stocks fell from a previous session’s highs and European stocks fell on Wednesday out of caution about the pace of the economic recovery, as the dollar hit record highs on Wednesday. one-week highs as investors reduced their exposure to riskier assets.
The central bank’s accommodative policies and optimism about reopening economies have pushed global stocks to record highs, but concerns are growing about the impact of rising coronavirus infections due to the Delta variant .
The markets are also still evaluating data from last week which shows the US economy created the fewest jobs in seven months in August.
The Fed is expected to move forward with a plan to scale back its massive asset purchase program despite slowing job growth, Federal Reserve Chairman of St. Louis said on Wednesday , in an interview with the Financial Times.
“Everything shrinks, shrinks, shrinks. We take a look at each central bank – when is the next one? “Said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management, adding,” the impact of the Delta variant continues to work like a wild card.
The MSCI World Stock Index fell 0.24% after seven straight days of gains.
European stocks fell more than 1% to their lowest in nearly three weeks. The UK FTSE 100 fell 0.85% to a two-week low.
S&P futures fell 0.34% after the S&P 500 lost 0.34% overnight. The Nasdaq Composite hit record highs as investors favored Big Tech stocks, which performed well during the pandemic.
“What awaits us is a continuous but temporary deceleration in economic activity of one to three months which probably started in August,” said Sébastien Galy, senior macro strategist at Nordea Asset Management.
In Europe, markets are wondering if the European Central Bank will start cutting its bond buying program this week.
The dollar hit a one-week high against the single currency and against a currency index, recovering from recent five-week lows.
Yields on 10-year Treasuries fell 1.3529% from a US close of 1.371% on Tuesday, retreating from this week’s eight-week highs. The yield on the 10-year German Bund edged down to -0.329%.
The MSCI’s largest Asia-Pacific stock index outside of Japan fell 0.68%, after stretching gains over the past eight sessions.
Australia slipped 0.24%, Hong Kong lost 0.45% and Chinese blue chips fell 0.41%, also penalized by recent weak data from the world’s second-largest economy.
Contrary to the regional trend, Japan’s Nikkei gained 0.89% to a five-month high, helped by revised gross domestic product growth figures exceeding expectations.
Bitcoin took a break after plunging 17% on Monday to a low of around $ 43,000 before recovering. It was last at $ 45,170, down 3.67%.
U.S. crude oil rose 0.42% to $ 68.64 per barrel and Brent crude rose 0.33% to $ 71.92 per barrel, with prices supported by a slow recovery in production in the Gulf from Mexico to the United States after Hurricane Ida struck the region.
Gold gained 0.21% to $ 1,797.25 an ounce, in line with risk aversion and just below the psychologically key $ 1,800 level it broke in the previous session.
Editing by Kenneth Maxwell & Shri Navaratnam, Editing by William Maclean