European shares dipped and the euro steadied today, with both on course to end the week down as worries about the euro zone's crisis strategy, the upcoming US election and slowing global economic growth limit the appeal of riskier assets.
Having enjoyed a 1.2 per cent gain yesterday, the Euro Stoxx 50 index of top European blue-chips dropped 0.3 per cent to 2478.57 points when trading resumed. It is course to end the week roughly 1.4 per cent lower.
"With concerns over the state of the global economy coming to the fore this week, along with negative sentiment surrounding a Chinese slowdown, and earnings season and the fiscal cliff garnering negative attention in the US, visibility for equity markets in the short term remains clouded to say the least," said Daniel Victory at Capital Spreads in London.
A central bank stimulus-inspired rally that pushed global equities up around 15 per cent from the lows of early June has stalled this week.
London's Ftse 100, Frankfurt's Dax and the Cac in Paris were all in negative territory at 8.15am (Irish time).
Following a flat finish on Wall Street, MSCI's broadest index of Asia Pacific shares outside Japan rose 0.3 per cent, but Japan's Nikkei fell 0.2 per cent to its lowest close in more than two months.
With many markets stuck in ranges as investors wait to see whether Spain requests a bailout, the euro tracked up to $1.2962. German Bund futures were 21 ticks higher at 141.36 at 0715 GMT while Spanish and Italian bond yields were little changed.
Commodities - with the exception of oil - were also mostly set to end the week in the red as investors fretted about the slowdown in China, which is due to release its latest trade data at the weekend.
Gold was trading at $1,769.84 an ounce, on course for a 0.6-per cent weekly loss, its sharpest one-week drop in two months.
Tensions between Turkey and Syria continued to support oil, with Brent crude holding above $115 a barrel, set for its biggest weekly gain in two months, while US crude firmed above $92.
"Crude is responding positively to the US economic data and ongoing tensions in the Middle East are adding to supply concerns," said Tim Waterer, a senior trader at CMC Global Markets in Sydney.
Investors were also cautious ahead of a busy day of data which includes what are expected to be upbeat European industrial production numbers later.
With the third quarter US reporting season under way eyes are also on how JP Morgan fares when it posts its results later today in the United States.
Reuters