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 Europe's FTSEurofirst was pushed into the red by a 9 percent slump
by Standard Chartered and 3 percent drop at VW leaving MSCI's
45-country All World index struggling to stay in positive territory
ahead of what was expected to be a lower start for Wall Street. [.N]
There was little new economic data for investors after a mixed batch
on Monday, but China helped bolster the mood as its President Xi
Jinping was quoted by state media saying growth would be no less
than 6.5 percent over the next five years.
Investors were still struggling for clarity on the next move from
the Federal Reserve and the European Central Bank, but Monday's
eyecatching milestone for the Nasdaq was a reminder of the effect of
years of stimulus.
"It shows that the risk appetite is still there," said Emile Cardon
at Rabobank. "Volatility is quite low again and the earnings of the
tech firms have been ok this quarter."
The dollar was beginning to find its feet again while Australia's
dollar gained almost 1 percent after the country's central bank kept
its rates on hold, disappointing those who had bet on a cut
following the recent turbulence from its big trade partner China.
Turkey's lira and stocks eased back slightly after strong
post-election gains on Monday, while the revived dollar pushed the
euro back below $1.10.
U.S. jobs data on Friday is expected to be the big influencer in
terms of the Fed's plans to raise its interest rates, while Mario
Draghi, whose ECB is flagging more stimulus, is due to speak at a
normally low-key event in Frankfurt later.
"Clearly the December FOMC (Federal Open Market Committee)meeting is
much more in the balance than we thought it was a couple of weeks
ago," said Adam Cole, head of currency strategy at RBC Capital
Markets.
ENGINE TROUBLE
U.S. stock index futures were slightly lower ahead of data later
(10:00 a.m. ET/1400 GMT) expected to show new orders for factory
goods fell 0.9 percent in September. U.S. carmakers will also
release their October sales numbers.
In Europe, a rise in energy shares <RDSa.L> <BG.L> had initially
propped up stocks but the support eventually gave way.
Standard Chartered was the main pull on the market as its shares
slumped 9 percent after it announced plans to raise $5.1 billion in
new capital through a rights issue and cut 15,000 jobs by 2018.
Volkswagen was back in reverse too, falling 3 percent after its
emissions test cheating scandal widened to include its luxury brands
Porsche and Audi .
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The expectation of more ECB stimulus saw euro zone bond yields -
which move inverse to prices - dip, while UK gilts and sterling both
took in their stride British construction data showing new work
coming in at its quickest in a year.
Overnight, MSCI's broadest index of Asia-Pacific shares outside
Japan broke a five-day losing streak to rise 1.1 percent. Activity
in the region was limited, though, with Japan's Nikkei closed for a
public holiday.
There was an element of global wariness too. Corporate earnings
growth expectations for the next year for the constituents of the
MSCI World, S&P500, Europe and Asian stocks are currently stuck near
five-year lows.
Within Asia, Jakarta and Hong Kong led the region higher. In China,
the CSI300 index of the largest listed companies in Shanghai and
Shenzhen was flat.
Wall Street had a good outing with major indexes in the black, led
by Nasdaq which rose 1.45 percent to its highest close since 2000,
though futures prices pointed to subdued restart later.
In commodities, oil was off its lows of the days though the prospect
of weak Chinese demand and record-high Russian production continued
to feed worries about global oversupply. [O/R]
Internationally traded Brent was up 75 cents at $49.10, gold nudged
down for a fifth straight day to $1,131 an ounce, while global
growth-attuned metal copper struggled at $5,126 a tonne as it faced
a fifth day of falls too.
(Additional reporting by Jemima Kelly; Editing by Raissa Kasolowsky)
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