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World shares dip after hitting record highs; U.S. yields rebound

Published 20/04/2021, 06:48 am
© Reuters.
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* Reuters Live Markets blog: LIVE/

(Updates to U.S. market close)

By Rodrigo Campos

NEW YORK, April 19 (Reuters) - An index of stocks across the world on Monday posted its largest daily drop in almost four weeks after touching a record high as investors looked for earnings to justify the high valuations in equities.

The U.S. dollar index touched a more than 6-week low and Treasury yields edged up after posting on Friday their largest weekly drop since June and oil prices slipped on concerns over rising coronavirus cases globally.

On Wall Street, indexes fell, with the Nasdaq .IXIC being the biggest decliner.

The Dow Jones Industrial Average .DJI fell 123.04 points, or 0.36%, to 34,077.63, the S&P 500 .SPX lost 22.21 points, or 0.53%, to 4,163.26 and the Nasdaq Composite .IXIC dropped 137.58 points, or 0.98%, to 13,914.77.

"Wall Street could be in for a few choppy trading weeks as more of the same strong earnings beats becomes the theme," Edward Moya, senior market analyst at OANDA, said in a note. "U.S. stocks appear to have hit a top as all the good news from corporate America has been mostly priced in and as the pause in rising yields continues."

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.28%, its largest daily drop since March 24.

The pan-European STOXX 600 index .STOXX lost 0.07% and Emerging market stocks lost 0.01%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.12% higher. Nikkei futures NKc1 lost 1.48%.

The dollar fell against a basket of peers on the back of the sharp drop in Treasury yields last week.

"Indeed, the USD rally is all but distant memory by now and the currency's underperformance seems to reflect the apparent divergence in the outlook between the slumping UST yields and the rather perky bond yields elsewhere," said Valentin Marinov, head of G10 FX research at Credit Agricole (PA:CAGR).

The dollar index =USD fell 0.564%, with the euro EUR= up 0.42% to $1.2033.

The Japanese yen strengthened 0.55% versus the greenback at 108.15 per dollar, while sterling GBP= was last trading at $1.3987, up 1.14% on the day, as traders bet on the British economy reopening amid the COVID-19 pandemic.

Treasury yields rose after last week's sharp drop.

"Yields are taking their cues from the equity markets," said Jim Barnes, director of fixed income for Bryn Mawr Trust.

He and others said investors are also waiting to gauge the market's appetite for $24 billion of 20-year bonds scheduled to be auctioned on Wednesday.

Benchmark 10-year notes US10YT=RR last fell 10/32 in price to yield 1.6064%, from 1.573% late on Friday.

Spot gold XAU= dropped 0.3% to $1,770.26 an ounce. Silver XAG= fell 0.56% to $25.81.

Bitcoin BTC=BTSP last fell 0.14% to $56,202.89.

Oil prices edged up, but rising COVID-19 infections in India prompted concern than stronger measures to contain the pandemic would hurt economic activity. weaker dollar makes oil cheaper for holders of other currencies. However, COVID-19 cases have surged in India, the world's third-biggest oil importer and consumer, dampening optimism for a sustained global recovery in demand.

"The primary hazard to continued oil price strength is the possible re-emergence of COVID-19 case counts on a broad scale," said Jim Ritterbusch, president of Ritterbusch and Associates.

U.S. crude CLc1 rose 0.43% to $63.40 per barrel and Brent LCOc1 was at $67.09, up 0.48% on the day.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh MSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j Emerging markets

http://tmsnrt.rs/2ihRugV

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