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Global stocks slip on U.S. election worry; oil prices weak

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Reuters NEW YORK
Last Updated : Nov 04 2016 | 9:07 PM IST

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - Global equity markets slipped amid investor concerns about the outcome of the U.S. presidential election on Nov. 8, while oil prices remained weak on concerns about surging inventories and whether OPEC members will adhere to planned production limits.

Weaker oil prices raised concerns about low inflation, sending U.S. Treasury prices higher, while election-related worries sent the dollar down against the safe-haven Swiss franc.

A dismal outing for key Asian and European share indexes weighed down the MSCI's 47-country "All World" index, which was down 0.28 percent. The index hit a 4-month low, but found some support from Wall Street.

U.S. stocks treaded water in choppy trade as uncertainty about the outcome of the election on Tuesday continued to weigh on investor sentiment and data showing a strong pace of hiring in October had little impact on the market.

U.S. employers maintained a strong pace of hiring in October and boosted wages for workers, which could effectively seal the case for a December interest rate increase from the U.S. Federal Reserve.

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"It's pretty strong, but it is not going to knock the election news off the headlines nor off the top of investors' minds," Sean Lynch, co-head of Global Equity Strategy at Wells Fargo Investment Institute in Omaha, Nebraska.

"A good data point confirms our view that they will raise rates in December and now investors go back to focusing on the election next week and go from there."

The Dow Jones industrial average rose 11.92 points, or 0.07 percent, to 17,942.59, the S&P 500 gained 4.41 points, or 0.21 percent, to 2,093.07 and the Nasdaq Composite added 11.71 points, or 0.23 percent, to 5,070.11.

Investors have been unnerved by signs the U.S. presidential race between Democrat Hillary Clinton and Republican Donald Trump is tightening; Clinton had until recently been thought to have a clear lead.

The latest Reuters/Ipsos polling showed Clinton, seen as the status quo candidate by markets, maintaining a narrow lead over Trump.

However, several swing states that the Republican challenger must win have shifted from favoring Clinton to toss-ups, offering Trump a possible route to victory.

European shares fell, weighed down by weaker drugmakers after two U.S. lawmakers called on federal antitrust regulators to open a probe for possible price fixing.

Europe's broad FTSEurofirst 300 index was down 0.78 percent at 1,296.44.

Oil futures were on course for their sixth straight day of falls amid tensions between Saudi Arabia and Iran that could scupper a key supply-cut pact while a surge in U.S. crude inventories and muted demand continued to weigh.

Brent crude was down 0.56 percent at $46.09 a barrel, while U.S. crude was down 0.36 percent at $44.50.

U.S. Treasury prices gained as the lower oil prices raised concerns about low inflation, and as uncertainty about the election enhanced the appeal of lower risk assets.

Benchmark 10-year notes were up 7/32 in price to yield 1.79 percent, after rising as high as 1.83 percent on the employment data.

Meanwhile, a solid U.S. jobs report that supported expectations for a December Federal Reserve interest rate hike failed to soothe nerves ahead of the election and the U.S. dollar slipped against the safe-haven Swiss franc.

The dollar was down 0.26 percent against the Swiss franc at 0.9713 franc, not far from a one-month low of 0.9691 touched Thursday.

Gold steadied, heading for its biggest weekly rise since mid-September as jitters over the election offset the solid payrolls report.

Spot gold prices were little changed at $1,302.16 an ounce.

(Additional reporting by Chuck Mikolajczak in New York; Editing by Bernadette Baum)

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First Published: Nov 04 2016 | 8:56 PM IST

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