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Global Markets: Stocks, dollar retreat after U.S.-North Korea summit

Reuters  |  LONDON 

By Ritvik Carvalho

LONDON (Reuters) - World stocks slipped on Tuesday and the dollar retreated from a three-week high after a U.S.-summit aimed at the denuclearisation of the

U.S. and North Korean leader Un pledged to work toward complete denuclearisation of the Korean peninsula, while committed to providing security guarantees for its old enemy.

The index, which tracks shares in 47 countries, fell nearly 0.1 percent on the day. The dollar slipped into negative territory in morning trade in after earlier reaching a three-week high. It was last flat on the day.

Investors had mixed reactions to the summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.

"Any de-escalation is good, because in the background you always have worries about these situations," said Global Investors European Ian Ormiston, adding trade conversations over the weekend at the summit were more concerning.

Others, such as RBC Capital Markets' said there was "nothing particularly game-changing" about the summit and both sides stood far apart on what denuclearisation means.

"To the U.S., it means must deliver complete, verifiable and irreversible denuclearisation. To Kim, it means suspends nuclear and missile tests in exchange for major economic concessions and the U.S. stepping back as torchbearer for the Asian region."

In Asian equity markets, trading was volatile with Japan's Nikkei paring early gains to close 0.3 percent higher after earlier rising as much as 0.9 percent.

MSCI's broadest index of shares outside seesawed between positive and negative, and was last up 0.15 percent. South Korean shares were weaker while Chinese shares were buoyant after starting in the red. The blue-chip CSI 300 index jumped about 1.3 percent.

had a muted open, with the pan-European index last up less than 0.1 percent. Futures indicated a lower open on Wall Street.

FOCUS SHIFTS TO CENTRAL BANKS

Investor focus was shifting to the two major central meetings later this week. The meets on Wednesday, where it is widely expected to raise interest rates for the second time this year.

Futures contracts indicate a 96 percent probability the fed funds rate will be raised a quarter of a percentage point on Wednesday, according to

Investors are focused on how characterizes its monetary policy as borrowing costs return to normal amid an economic expansion. The Fed may signal whether it feels the era of loose money is, in effect, over.

U.S. inflation data due later in the day will also add to speculation over the path for U.S. interest rates later this year. Markets now are pricing in slightly more than one chance in five rates will be raised for a fourth time this year.

On Thursday, the European Central meets, and some expect the Bank to provide guidance for an ending of its bond-buying programme at the end of this year.

The spread between Italian and German 10-year borrowing costs narrowed as the U.S.-North Korea summit drew to a close, adding a relief rally on reassuring comments from Italy's new

In currencies, the dollar was 0.1 percent lower against a basket of its peers. It jumped to a three-week top against the yen of 110.49 and was last at 110.25.

The British pound was up 0.1 percent as a crucial parliamentary debate began on amendments to Britain's withdrawal bill.

The euro was flat.

In commodities, U.S. crude was down 0.3 percent to $65.94 per barrel. Brent crude fell half a percent to $76.07.

Spot gold slipped 0.2 percent to $1,297.64 an ounce.

(Reporting by Ritvik Carvalho; additional reporting by in London; editing by Janet Lawrence)

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

First Published: Tue, June 12 2018. 17:18 IST
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