By David Randall
NEW YORK, May 28 (Reuters) - A slight gain in benchmark U.S. indices early on Tuesday was not enough to turn global stock markets higher as concerns about Italy's budget and the fate of U.S.-China trade talks continued to weigh on investor sentiment.
Markets had been cheered by limited gains for nationalists in the EU elections, though wins for euroskeptic parties in Italy, France, Poland and would-be ex-member Britain, as well as snap elections in Greece and political turmoil in Austria, curbed risk appetite. dispute with the European Commission, however, emerged to dominate European trading as markets opened. The Commission could fine Italy 3 billion euros for accumulating debt and deficits that break EU rules, Italian Deputy Prime Minister Matteo Salvini said on Tuesday. reopens the whole agenda of whether Salvini wants to be part of the euro or not," said Colin Harte, portfolio manager and strategist at BNP Paribas (PA:BNPP) Asset Management.
"The danger is that the (dispute between Salvini and the EU) turns out to be more aggressive on both sides, then you will see people switch out of positions," Harte said.
In the United States, the Dow Jones Industrial Average .DJI rose 66.29 points, or 0.26%, to 25,651.98, the S&P 500 .SPX gained 6.54 points, or 0.23%, to 2,832.6 and the Nasdaq Composite .IXIC added 33.72 points, or 0.44%, to 7,670.72.
The pan-European STOXX 600 index .STOXX lost 0.06% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.12%.
High-grade euro zone bond yields were lower across the board in a risk-off environment, with the ousting of Austrian Chancellor Sebastian Kurz adding to nervousness. yields were also lower. Benchmark 10-year Treasury notes US10YT=RR yielded 2.27%, down five basis points.
Trade worries remained high. U.S. President Donald Trump said on Monday that Washington was not ready to make a deal with China, but that he expected one in the future. At the same time, he pressed Japanese Prime Minister Shinzo Abe to reduce Japan's trade imbalance with the United States. for a U.S.-China trade agreement still underpins optimism in global markets.
"Markets are holding their nerve and will start to attach great hope to the meeting between Presidents Xi and Trump in June," said BNP Paribas' Harte. "But I'm not as convinced that Trump wants a deal.
"The big risk is that the U.S. starts being disruptive to supply chains... and the big problem is we don't really understand how much damage this will do."
Auto stocks rose globally after Fiat Chrysler FCHA.MI confirmed it had proposed a merger with Renault RENA.PA , a deal that would create the world's third-biggest carmaker. The rally spilled into Asia with Mitsubishi Motors Corp 7211.T in Japan adding 5.95% and Nissan Motor Co 7201.T gaining 2.31%.
The dollar index .DXY , which tracks the U.S. currency against a basket of six other major currencies, rose 0.17% higher at 97.782.
In commodity markets, oil prices extended gains after rising more than 1% on Monday. Prices rose on tensions in the Middle East and continuing Russian supply disruptions after a contamination problem discovered last month. crude LCOc1 was 0.31% higher at $70.33 per barrel, having earlier dipped below the $70 mark. U.S. West Texas Intermediate crude CLc1 gained 1.16% to $59.31 per barrel.
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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh Global bonds dashboard (DO NOT USE UNTIL UPDATE FOUND)
http://tmsnrt.rs/2fPTds0 Emerging markets in 2019
http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap
http://tmsnrt.rs/2EmTD6j
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