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Wall St falls on capital tax increase angst; dollar rises

Published 23/04/2021, 07:33 am
© Reuters.
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* Oil ticks up with eyes on virus, Libya

* Dollar index posts strongest gain this month (Updates to U.S. market close)

By Rodrigo Campos

NEW YORK, April 22 (Reuters) - An index of stocks across the world fell on Thursday weighed by Wall Street after reports that the Biden administration will propose a sharp increase to capital gains tax, while the dollar index rose as the euro and pound gave back recent gains.

Oil prices rose as concerns over Libyan output more than offset worries that rising coronavirus cases in India and Japan would cause energy demand to decline.

On Wall Street, indexes ended lower after reports that the Biden administration is seeking to raise the capitals gains tax to near 40% for wealthy individuals, almost double the current rate. proposal would need congressional approval, and analysts expected it to be watered down as it makes its way through Congress. they're going to tax people more and their net is going to fall, the value of that instrument is lower. Incentives matter," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

"A lot of money that's in the market at this point is non taxable, and I don't think people do that calculation. Whenever they see news (like this), they just sell, they want to take the gains this year."

The Dow Jones Industrial Average .DJI fell 321.41 points, or 0.94%, to 33,815.9, the S&P 500 .SPX lost 38.44 points, or 0.92%, to 4,134.98 and the Nasdaq Composite .IXIC dropped 131.81 points, or 0.94%, to 13,818.41.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.23% and the pan-European STOXX 600 index .STOXX rose 0.68%. Emerging market stocks .MSCIEF rose 0.34%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.4% higher, while Japan's Topix .TOPX rose 1.82%. Nikkei futures NKc1 were little changed.

Treasury yields fell alongside stocks on the capital gains tax issue.

Benchmark 10-year notes US10YT=RR last rose 7/32 in price to yield 1.5416%, from 1.564% late on Wednesday, remaining in a tight range so far this week.

Oil prices ended higher as lower output in Libya more than offset concern over demand from India, the third-largest global consumer, where a second wave of coronavirus infections has overwhelmed hospitals. crude CLc1 rose 0.52% to $61.67 per barrel and Brent LCOc1 was at $65.60, up 0.43% on the day.

In currency markets, the dollar =USD rose as the pound gave back some of its recent sharp gains while the euro was weighed by an ECB statement that was hopeful on the economic recovery but lacking in details about the stimulus removal.

U.S. Federal Reserve and Bank of Japan meetings follow next week.

The dollar index =USD rose 0.178%, with the euro EUR= down 0.15% to $1.2015.

The Japanese yen strengthened 0.10% versus the greenback at 107.96 per dollar, while Sterling GBP= was last trading at $1.3841, down 0.63% on the day.

The Russian ruble rose against the dollar after Moscow signaled an end to military drills near the Ukraine border, easing some of the geopolitical risk premium.

The ruble strengthened 1.78% versus the greenback at 75.29 per dollar.

Turkish markets suffered under the weight of expectations that U.S. President Joe Biden will formally recognize the massacre of Armenians by the Ottoman Empire during World War One as an act of genocide.

The lira lost 1.64% versus the U.S. dollar at 8.31.

Spot gold XAU= dropped 0.6% to $1,783.68 an ounce. Silver XAG= fell 1.71% to $26.12.

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