World stocks have stalled near record highs and currency markets stayed little changed as trading dwindled before the Christmas holiday and investors took profit on gains made this month.
The pan-European STOXX 600 index was down 0.14 per cent by 0851 GMT on Monday, after nearing a record high in the previous session. MSCI’s broadest index of Asia-Pacific shares outside Japan was near its highest since June 2018, up 0.05 per cent.
The MSCI all-country stock index was flat, just below Friday’s record high. It has risen nearly 3 per cent this month as US-China trade tensions eased and confidence grew that Britain would avoid a chaotic exit from the European Union. The index is up 23 per cent so far in 2019, set for its best year since 2009.
US President Donald Trump said on Saturday the United States and China would “very shortly” sign phase one a trade agreement. It calls for the United States to reduce some tariffs in exchange for China’s buying more American farm products. China said on Monday it would lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year.
“The Phase 1 (P1) agreement and UK elections have cleared up tail risks, but the market is now transcending that euphoria,” said Stephen Innes, strategist at AxiTrader.
“While P1 is already reflected in stock prices, positioning is still relatively light, and with plenty of capital yet to be deployed, markets could even push significantly higher supported by the global growth rebound,” he added.
On Friday, the US benchmark S&P 500 extended its record highs to seven straight sessions, its longest streak in more than two years. All three major US indexes – the S&P 500, Nasdaq and Dow – gained..
Data on Friday showed US growth rose in the third quarter and the economy was probably maintained its expansion as the year ended. Consumer spending was stronger than previously reported, and there were upgrades to business spending.
During Asian hours on Monday, Japan’s Nikkei was little changed after reaching a 14-month top last week. It was up 2.3 per cent for the month so far.
Chinese stocks posted their worst single-day drop in six weeks, weighed down by a correction in tech shares after a state fund announced plans to cut its stakes in some chip makers.
The US personal consumption expenditure deflator for November, due on Friday, is the only major economic report this week.
In currency markets, the euro was at $US1.1083, up 0.05 per cent after slipping 0.4 per cent last week. Sterling was at $US1.3027, edging up 0.18 per cent from Friday’s three-week low of $US1.2976. It slid 2.6 per cent last week for its worst weekly showing since October 2017. The safe-haven Japanese yen was down 0.08 per cent at 109.35.
That left the dollar index at 97.604, down 0.09 per cent against six major currencies.
In commodities, Brent crude was down 23 cents to $US65.95 a barrel. West Texas Intermediate crude slipped 24 cents to $US60.2 a barrel.
Spot gold was up 0.4 per cent at $US1,484.07 an ounce.