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Global stocks fall, bond markets rally as Trump optimism pauses
February 21, 2017 / 12:53 AM / 6 months ago

Global stocks fall, bond markets rally as Trump optimism pauses

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 22, 2017.Brendan McDermid

NEW YORK (Reuters) - Key global stock markets fell on Friday as investors lowered bets that policies of U.S. President Donald Trump would benefit economic growth, and instead favoured assets considered safer such as bonds and gold.

Oil futures fell, pressuring energy stocks after data showed U.S. crude inventories rose for a seventh week, signalling oversupply despite OPEC's efforts to rein in output.

The dollar were little changed but set for a weekly decline as the Trump administration's lack of details on tax cuts and infrastructure spending raised doubts about the chances for improved domestic growth and investments in 2017.

"The market will come to realize that a lot of these pro-growth policies might get pushed to the end of this year or next year and you might have this buyer's remorse for the market," said Aaron Clark, portfolio manager at GW&K Investment Management.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 46 nations, fell 2.49 points or 0.56 percent, to 444.26. It reached an all-time peak at 447.67 on Thursday.

On Wall Street, the Dow Jones Industrial Average, which tracks blue-chip stocks, was on track to end a 10-day winning streak, the longest since 1987. It was last .DJI down 57.54 points, or 0.28 percent, to 20,752.78.

The benchmark S&P 500 .SPX lost 7.45 points, or 0.32 percent, to 2,356.36, below its record high of 2,368.26 set on Thursday.

A billboard displays the morning trading on the first day of trade after Lunar New Year at the Hong Kong Exchanges in Hong Kong February 1, 2017.Bobby Yip

The Nasdaq Composite .IXIC declined for a third straight day, which last happened in late December. It was down 23.47 points, or 0.4 percent, at 5,812.04.

Europe's broad FTSEurofirst 300 index .FTEU3 dropped 0.96 percent at 1,456.05.

Similar to stocks, the greenback was on its back foot. The dollar index .DXY was down 0.1 percent at 100.93, on track for a slim weekly loss.

A man walks past an electronic board showing stock prices outside a brokerage in Tokyo, Japan, January 4, 2017.Kim Kyung-Hoon

As equities and the dollar lost some of their appeal, bond yields fell with German two-year Schatz yield DE2YT=RR touching minus 0.953 percent, Reuters data showed.

Nervousness about the first round of the French presidential election, with anti-European Union Marine Le Pen in the lead, has stoked safehaven demand for German and U.S. government debt.

Bids for less risky assets, together with traders' remote view of the Federal Reserve raising interest rates in March, bolstered gold prices to their highest in over three months.

Spot gold prices XAU= rose $7.17 or 0.57 percent to $1,256.51 an ounce.

In the oil market, Brent crude LCOc1 was last down $0.39, or down 0.69 percent, at $56.19 a barrel. U.S. crude CLc1 was last down $0.27, or down 0.5 percent, at $54.18 per barrel.

Reporting by Tanya Agrawal in New York and Vikram Subhedar in London; Editing by Bernadette Baum

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