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Global Markets: Stocks capped by trade war concerns, central banks

Reuters  |  NEW YORK 

By Nick Brown

(Reuters) - Stocks across the globe wavered on Wednesday on fears of trade tensions and questions about U.S. interest rates, while lower-than-expected inventory data sent into the black after morning losses.

Investors are awaiting the U.S. Federal Reserve's 2:00 p.m. ET (1800 GMT) decision on monetary policy, with the year's second interest rate hike almost certain.

But market participants are keen to know how many times the Fed will raise rates in 2018, with market pricing "fairly split between three and four hikes," wrote in a note to clients.

Amid the uncertainty, Wall Street opened slightly firmer, buoyed by a jump in after Tuesday's court ruling allowing AT&T's $85 billion take over of - a move expected to trigger a wave of corporate mergers.

Shares of the channel owner jumped about 3 percent after the approval, while dropped 1.6 percent.

Overall, stock markets were moving up, but tepidly.

The Dow Jones Industrial Average rose 18.88 points, or 0.07 percent, to 25,339.61, the gained 4 points, or 0.14 percent, to 2,790.85 and the added 42.30 points, or 0.55 percent, to 7,746.09.

The pan-European index rose 0.19 percent, and MSCI's gauge of stocks across the globe, which has been stagnating near one-month highs for about a week, gained 0.09 percent.

Equity markets are "finding it difficult to make upward progress despite reasonably good economic data", said Andrew Milligan, at

Along with the Fed and other key central this week, fresh fears of protectionism are weighing on stocks and currencies as the U.S. prepares to unveil more tariffs on $50 billion worth of Chinese goods.

Emerging market stocks lost 0.37 percent, while MSCI's broadest index of shares outside closed 0.58 percent lower.

Trade tensions pressured the Mexican peso and Canadian dollar, which gained 0.46 and 0.35 percent, respectively, versus the greenback.

The dollar index, which measures the U.S. currency against a basket of others, fell 0.2 percent, with the euro up 0.29 percent to $1.1777.

CRUDE INVENTORY LOWER

Oil prices, which had started the day in the red, rose after a report by the indicated U.S. crude inventories fell more than anticipated last week and while gasoline and distillate stocks surprised with unexpected declines.

U.S. crude was up 0.36 percent to $66.60 per barrel and Brent was last at $76.36, up 0.63 percent on the day. Gasoline futures were up 1.1 percent to $2.1124 a gallon.

"You tend to want to see draws in gasoline early in the summer with driving season, and this is the first number that actually does that ... in three weeks," said Bob Yawger, director of at Mizuho in

In government bonds, yields were flat on Wednesday, moving in narrow ranges, with investors firmly focused on the Fed meeting.

Benchmark 10-year notes last rose 1/32 in price to yield 2.9535 percent, from 2.957 percent late on Tuesday.

The 30-year bond last rose 6/32 in price to yield 3.0823 percent, from 3.092 percent Tuesday.

bonds were in demand, as well, after Paolo Savona, the country's new EU Affairs Minister, said the euro was "indispensable."

The comments by Savona, who has previously expressed hostile views on the euro, followed statements earlier in the week by Italy's new coalition government that it had no plans to leave the euro zone.

In another reminder of the danger of trade disputes, shares in Chinese fell as much as 41.5 percent, wiping $3 billion off its market value, as it resumed trade after agreeing to pay up to $1.4 billion in penalties to the

(Additional reporting by Sujata Rao, and Sruthi Shankar; Editing by and Nick Zieminski)

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

First Published: Wed, June 13 2018. 21:33 IST
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