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Stocks sink as investors await earnings, US data


Bangladeshpost
Published : 12 Apr 2021 07:37 PM

Global stock markets sank on Monday as investors waited to see whether US earnings would justify sky-high valuations, while a rally in bonds could be tested by what should be strong readings for US inflation and retail sales this week, Reuters reports.

MSCI’s All Country World Index, which tracks stocks across 49 countries, was down 0.25% after the start of European trading, off Friday’s record high.

European shares eased off record highs as investors held off from making big bets before earnings season. The pan-European STOXX 600 index was down 0.3% by 0813 GMT. Britain’s domestically focused FTSE mid 250 index slipped 0.6%, but held below a record high as shops, pubs, gyms and hairdressers re-opened after three months of lockdown. The UK’s more export-oriented FTSE 100 fell 0.9%, Germany’s DAX slipped 0.1% and France’s CAC 40 fell 0.2%. Italy’s FTSE MIB was the sole gainer, up 0.05%. The VIX volatility index, also known as Wall Street’s “fear gauge”, ticked slightly higher to 17.44, having hit its lowest level since March 2020 on Friday.

“The drop indicates that investor sentiment is improving amid a perception of receding market risk,” strategists at BCA Research said in a note to clients. “This progress is in line with other market developments: the S&P 500 is forging all-time highs and Treasury bond yields have been climbing since August, buoyed by the improving economic outlook.”

Earlier in Asia, Tokyo’s Nikkei edged down 0.6%. South Korean stocks were near flat.

The Nifty 50 index slid 2.4% as India overtook Brazil to become the country with the second most COVID-19 cases. Chinese blue chips lost 1.5% before a series of economic figures from the country.

Shares in Alibaba Group Holding Ltd rose 16% after China imposed a record 18 billion-yuan ($2.75 billion) fine on the e-commerce giant. Over a third of the stock is held by U.S. investors, and it makes up more than 8% of the MSCI EM index.

Nasdaq futures slipped 0.1% on Monday. S&P 500 futures fell 0.2%.

Growth and tech stocks saw something of a revival last week as U.S. 10-year Treasury yields retreated to 1.65%, from a 14-month top of 1.776%. Over the weekend, Federal Reserve Chair Jerome Powell said the economy was about to start growing faster, though the coronavirus remained a threat.

Data out this week are expected to show U.S. inflation jumped in March. Retail sales are seen surging, perhaps even with a double-digit gain. Treasury is also set to test demand with offers of $100 billion in debt this week.