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GLOBAL MARKETS-Shares tumble on impatience over Trump policies; euro gains

Published 22/03/2017, 03:09 am
© Reuters.  GLOBAL MARKETS-Shares tumble on impatience over Trump policies; euro gains
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* Concerns that Trump policies on hold hurt stocks

* U.S. financial shares plunge more than 2 pct

* Benchmark Treasury yields hit nearly 3-week lows

* Spot gold prices hit more than 2-week high

* Euro hits more than 6-week high vs dollar

* Centrist Macron seen as victor in French presidential TV debate (Updates to open of U.S. trading; changes byline, dateline, pvs LONDON)

By Sam Forgione

NEW YORK, March 21 (Reuters) - U.S. and European shares tumbled on Tuesday on concerns that higher interest rates and pro-growth U.S. policies were on hold, boosting safe-haven Treasuries and gold prices, while the euro hit a more than six-week high against the dollar on soothed French election worries.

The U.S. S&P 500 financial sector .SPSY fell more than 2 percent and was on track for its biggest daily plunge in two months. Analysts attributed the selling to reduced confidence that U.S. President Donald Trump's pro-growth policies, including financial deregulation, would occur soon, and to concerns of a dovish Federal Reserve. Fed stuck to its outlook for two more hikes this year last week, instead of the three expected by many market participants.

The tech-heavy U.S. Nasdaq Composite fell more than 1.3 percent after hitting a record intraday high earlier on the back of Apple AAPL.O shares, which briefly touched a record $142.80 a share. Europe's broad FTSEurofirst 300 .FTEU3 stock index also fell after earlier hitting a 15-month high.

"Led by financials and industrials, the stock selloff suggests that investors may be less confident that the Trump administration's pro-growth announcements will be translated into policy implementation soon," said Mohamed El-Erian, chief economic adviser at Allianz (DE:ALVG) in Newport Beach, California.

MSCI's all-country world equity index .MIWD00000PUS was last down 1.81 points, or 0.4 percent, at 449.25.

The Dow Jones Industrial Average .DJI fell 157.17 points, or 0.75 percent, to 20,748.69. The S&P 500 .SPX lost 18.33 points, or 0.77 percent, to 2,355.14. The Nasdaq Composite .IXIC dropped 62.08 points, or 1.05 percent, to 5,839.45. broad FTSEurofirst 300 index .FTEU3 dropped 0.54 percent to 1,480.27.

The euro EUR= hit $1.0819, its highest level against the dollar since Feb. 2. Centrist Emmanuel Macron cemented his position as front-runner in the first televised French presidential debate on Monday versus anti-European Union contender Marine Le Pen. euro gained on relief over the debate results, since a win by the far-right Le Pen is seen as posing a risk of euro zone break-up.

"Any news between now and the French election next month that suggests fading risk of a Le Pen victory would probably be supportive of the euro," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

U.S. crude oil prices hit a one-week low of $47.50 a barrel as the market discounted the latest talk by OPEC that it would extend output cuts beyond June. crude LCOc1 was last down 31 cents, or 0.6 percent, at $51.31 a barrel. U.S. crude CLc1 was down 50 cents, or 1.04 percent, at $47.72 per barrel.

Safe-haven spot gold and U.S. Treasuries benefited, with gold hitting a more than two-week high of $1,243.80 an ounce and benchmark 10-year U.S. Treasury yields US10YT=RR touching a nearly three-week low of 2.425 percent.

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