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Global stocks sink as soft China data, trade fears weigh

Reuters  |  LONDON 

By Alasdair Pal

(Reuters) - World stocks fell on Tuesday as investors digested soft Chinese economic data and a lack of progress in U.S.-trade talks, though companies were a bright spot as crude hit a three-and-a-half-year high.

MSCI's world equity index, which tracks shares in 47 countries, was down 0.3 percent.

Futures pointed to a lower open for U.S. equities, with down 0.2 percent.

European stocks snapped early losses, with the rising 0.2 percent and helped by stocks, that rose by nearly a percent.

The UK's and Italy's FTSE MIB, both of which have high weightings to energy stocks, rose by 0.4 percent.

MSCI's broadest index of shares outside fell 1.2 percent, after reported weaker-than-expected investment and in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the

Mixed messages in U.S.-trade talks also weighed on sentiment for global investors.

The two countries are still "very far apart" on resolving trade frictions, U.S. to China said on Tuesday as a second round of high-level talks was set to begin in

U.S. drew ire from lawmakers after suggesting he would help Chinese firm ZTE Corp, that flouted U.S. sanctions on trade with and North Korea, with intelligence officials also saying the decision threatens national security.

"Sino-U.S. trade negotiations have provided mixed signals, the promising conciliation (over ZTE) then indicating that some form of punishment is still in the cards," said Mike van Dulken,


hit a 3-1/2-year high on Tuesday, supported by tight supply and planned U.S. sanctions against that are likely to restrict from one of the biggest producers in the

Brent crude futures, the international for oil prices, rose to as much as $79.22 per barrel, its highest level since November 2014.

"are touching fresh multi-year highs as robust demand prospects coupled with a tense geopolitical backdrop make for a potent bullish cocktail," said Stephen Brennock, at brokers


In fixed income, the U.S. 10-year bond yield rose above the key level of 3 percent, sending borrowing costs higher in a number of other countries and supporting the dollar.

The 10-year yield was last trading at 3.0318 percent, just off levels not seen since January 2014.

In Europe, the German bond yield rose to 0.636 percent, its highest level in three weeks, with investors also taking note of hawkish commentary from Francois Villeroy de Galhau, who said the could soon give guidance on its first rate hike.

"We have this Galhau interview and he was very much pointing to rate hikes after the end of QE (quantitative easing)," said Daniel Lenz, explaining the weakness in euro zone debt markets. "And we still have a and yields above 3 percent."

Against a basket of six major currencies, the dollar index gained 0.46 percent.

(Reporting by Alasdair Pal; additional reporting by and in London; Editing by and Adrian Croft)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 18:21 IST