That pattern was set in Asia, where markets took a break from recent
volatile trading but struggled to do much more than make incremental
moves. U.S. stock index futures <.SPc1> and benchmark debt were also
flat ahead of the Wall Street open.
World shares <.MIWD00000PUS> and the euro zone's blue-chip Euro
STOXX 50 <.STOXX50E> were both down 0.1 percent after hovering near
the previous day's close for most of the morning, unable to match
the marginal gains seen in Asia <.MIAPJ0000PUS>.
"Market players remain cautious. There's a lack of enthusiasm in
chasing stocks, and some are just thinking about moving to the
sidelines after the roller-coaster ride we've had since the start of
the year," said Guillaume Dumans, co-head of research firm 2Bremans.
The standout gainer across European indexes was Portugal's PSI 20
<.PSI20>, which rose 0.8 percent for a gain close to its three-year
intraday high, as debt yields in the country dropped to their lowest
since April 10 on optimism the country can exit its international
bailout program later this year.
Strong trade data from Germany, the region's economic powerhouse,
helped the country's DAX <.GDAXI> index outperform. But gains were
pared by late morning and safe-haven German debt edged off its lows
on Ukraine concerns, with Bund futures at 142.64.
"Recent events, especially concerning Russia and Turkey, have made
the outlook less certain, and their impact will only be felt in a
few months from now," said Markus Huber, a senior sales trader at
Peregrine & Black.
Tensions over Ukraine continued to build on Tuesday. With diplomacy
at a standstill, Ukraine's acting president announced the formation
of a volunteer national guard, while ousted leader Viktor Yanukovich
insisted he remained the country's legitimate leader.
Turkish assets have been hit by political scandals and a power
struggle between Prime Minister Tayyip Erdogan and a U.S.-based
The euro began the day on a lackluster note and later extended its
dip to be down 0.2 percent against the dollar after a leading
central banker reminded the market that the European Central Bank
was in accommodative mode.
Elsewhere, a safe-haven bid for the yen kept it flat, even after
comments from Bank of Japan chief Haruhiko Kuroda that there was no
need to adjust Japanese monetary policy for now.
[to top of second column]
"Dollar/yen has been in a range between 101-104 yen for much of this
year and the yen needs a fresh trigger for the next leg of
weakness," said Peter Kinsella, currency strategist at Commerzbank.
"That could come from a steady deterioration in Japan's trade and
current account deficits."
Against a basket of currencies <.DXY>, the U.S. dollar edged higher
by late morning to trade up 0.1 percent.
After recent major ructions in metals markets following February's
drop in Chinese exports, prices for industrial commodities bounced
off recent lows but trade remained cautious.
Dealers in Asia remained especially nervous about iron ore, however,
<.IO62-CNI=SI> following an 8 percent slide on Monday that fuelled
unease about the health of China's giant steel sector.
Both gold and crude oil extended early gains as Ukraine strengthened
the bid in both markets and kept them near intraday highs.
Brent crude, Europe's regional benchmark, gained 49 cents to $108.57
a barrel, while gains for U.S. oil were more measured, ahead 28
cents. Both reversed a slight weakness during the Asian day.
Gold, meanwhile, was at $1,349 an ounce. In a sign of the recent
jump in demand, the world's biggest bullion-backed exchange-traded
fund saw its largest inflow in a month on Monday.
"Gold continues to be largely supported above $1,329, and while
prices are unlikely to break above $1,361.60 in the absence of war,
underlying support from the Ukrainian crisis ... is likely to keep
prices elevated above $1,320 for an extended time," said Joyce Liu,
an analyst at Phillip Futures.
(Additional reporting by A.
Ananthalakshmi in Singapore, Wayne Cole in Sydney, Anirban Nag and
Francesco Canepa in London)
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