🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

GLOBAL MARKETS-World stocks down from 9-month highs

Published 07/22/2009, 07:58 AM
BARC
-
CL
-

* Euro zone industrial data adds pressure on global stocks

* Dollar softer vs major currencies but recovers from lows

* Oil under pressure after U.S. crude stocks data

By Sebastian Tong

LONDON, July 22 (Reuters) - World stocks backed away from nine-month highs on Wednesday as worse-than-expected euro zone industrial figures and a warning about rising unemployment from U.S. Federal Reserve Chairman Ben Bernanke broke a seven-day winning streak.

The dollar was a touch softer against major currencies while oil remained under pressure after weekly stock data showed an unexpected rise in U.S. crude stocks.

MSCI's all-country world stock index was 0,02 percent lower, just off a 2009 high reached on Tuesday that took the index to levels last seen in October 2008.

The FTSEurofirst 300 index of top European shares was down 0.4 percent but defensive plays such as utilities stocks were in demand as risk appetite receded.

Quarterly corporate earnings reports, including from U.S. majors, have provided positive surprises over the past week, helping to drive the recent rally.

But Fed chief Bernanke on Tuesday sounded a note of caution, saying U.S. unemployment was likely to remain high into 2011 and could sap consumer confidence and scupper an economic recovery.

Data showing May euro zone industrial orders falling by nearly a third year-on-year and down from a month ago despute expectations of a rebound provided another sobering reminder of the fragility of the global economy.

"There's a lot of hope priced in about the strength of the recovery... Hope is good breakfast but a poor supper, eventually we'll have to see some meat on the table if the rally is to be sustained," said Henk Potts, strategist at Barclays Stock Brokers.

DOLLAR SOFTER

The dollar softened but recovered from earlier losses from Bernanke's comments, which implied U.S. interest rates would stay low for some time.

"Bernanke was trying to improve policy credibility in the market and anchor inflation expectations," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

"The dollar has been broadly stable and that is a sign that Bernanke's message has come across well," he said.

The dollar index, a gauge of its performance against six major currencies, was edged 0.2 percent lower at 78.800 after touching 78.591 on Tuesday, its lowest since June 3.

The euro stayed under pressure after hitting a seven-week high on Tuesday at $1.4278, close to its peak for the year.

Crude oil was down 60 cents but recovered to peek above $65 a barrel, recovering from earlier lows after an unexpected rise in U.S. crude stocks suggested demand in the world's top energy consumer was still weak. (To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub click on http://blogs.reuters.com/hedgehub) (Additional reporting by Jeremy Gaunt and David Brett; Editing by Victoria Main)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.