Written by 1:11 pm Europe Economy

Global stocks waver as dust settles after Japan policy move

Global stock markets dipped slightly on Thursday, pausing after the previous day’s rally on Wall Street helped by improved consumer confidence in the US.

The Stoxx Europe 600 was 0.1 per cent lower midway through the session, following the previous session’s 1.7 per cent gain. The MSCI Asia Pacific also fell 0.1 per cent, as the dust continued to settle on the Bank of Japan’s decision to relax its policy of pinning bond yields near zero earlier this week.

US stock futures indicated losses of 0.2 per cent for the S&P 500 and 0.3 per cent the tech-heavy Nasdaq 100 on Thursday. In a quiet period for economic data in the run-up to Christmas, investors had seized on Wednesday’s figures showing US consumer confidence at an eight-month high in December as inflation fell back, according to Deutsche Bank strategist Jim Reid.

The UK’s FTSE 100 bucked the broader trend, however, rising 0.4 per cent.

Global bond markets, which had been rocked by the BoJ’s surprise announcement on Tuesday, were broadly steady. The 10-year US Treasury yield fell by 0.03 percentage points to 3.66 per cent, while yields in the eurozone and the UK climbed slightly.

In currency markets, the pound fell following data showing the UK economy contracted by a larger than expected 0.3 per cent in the third quarter. Sterling traded 0.3 per cent lower against the dollar at $1.204.

The figures suggest the anticipated downturn in the UK economy could arrive sooner than previously expected, said Investec economist Ellie Henderson.

“The question now is whether the economy manages to eke out growth in [the fourth quarter] and avoid a recession at the end of the year,” she said.

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