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Global stock sell off eases as Yen falls with Gold
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Loading...A global equities selloff that spurred the biggest drop in shares since Donald Trump’s election eased as investors stepped back before a key U.S. vote on health care.
The yen halted a seven-day rally and gold retreated.
European and Japanese shares were little changed while Australian and South Korean stocks rose after the S&P 500 Index nudged higher. Treasury 10-year yields were steady after four days of losses. The kiwi was flat after New Zealand’s central bank kept its benchmark rate at a record low 1.75 percent. Oil futures climbed.
The gains in U.S. equities provided a measure of calm to the market after a selloff spread across Asia on Wednesday.
Volatility spiked before a Republican health-care bill is set for a vote in Congress. Lawmakers have signaled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election in November. The depth of selling drew some investors back in on speculation the drop went too far given data showing strength in the global economy.
The selloff was the biggest for stocks since the November election. Equities had largely escaped investors’ efforts this year to unwind so-called Trump trades. While the dollar has fallen 4.4 percent from a January peak, global stocks have climbed to new highs, with the MSCI All Country World Index reaching a record last week.
The Stoxx Europe 600 Index fluctuated between gains and losses as of 8:09 a.m. in London. Japan’s Topix closed little changed after plunging 2.1 percent on Wednesday. Australia’s S&P/ASX 200 Index added 0.4 percent.
The MSCI Emerging Market Index was little changed after falling 0.6 percent Wednesday in its first retreat in almost two weeks. The Hang Seng China Enterprises Index rose 0.3 percent, after tumbling 1.8 percent in the previous session. Indonesia’s benchmark index increased 0.6 percent.
Futures on the S&P 500 increased 0.1 percent. The benchmark gauge added 0.2 percent on Wednesday after plunging 1.2 percent, the most since October, in the previous session.
The Bloomberg Dollar Spot Index rose 0.1 percent after a six- day slump, the longest string of losses since early November.
The yen fell 0.1 percent to 111.22 per dollar, after reaching the highest level since November on Wednesday.
The Australian dollar dropped 0.7 percent and the New Zealand dollar rose less than 0.1 percent.
The British pound was little changed after London’s worst terror attack in more than a decade. Five people died, including the assailant and the police officer he stabbed, and at least 40 injured. The euro fell less than 0.1 percent to $1.0792.
Gold fell 0.2 percent to $1,246.81, after a six-day advance that totaled 4.2 percent.
Oil added 0.5 percent to $48.29 a barrel on speculation record U.S. crude stockpiles that have undermined OPEC’s output cuts may finally be set to shrink.
Bloomberg
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