LONDON (AP) — Markets were subdued Monday following a stellar finish to last week, when many stock indexes around the world hit multiyear highs following encouraging U.S. economic figures.
U.S. stocks are particularly in focus as the Dow jones industrial average closed above 14,000 on Friday for the first time in over five years. It’s now not far off its all-time high.
Hopes over the U.S. economy have helped fuel the optimism across financial markets this year, which has also seen the euro pick up a head of steam and oil prices approach the $ 100 a barrel mark.
However, with a dearth of scheduled economic news Monday, many think markets will struggle for direction and some investors may use the opportunity to book some gains.
“In recent weeks the mantra seems to have been very much one of buying regardless, but now that the major indices have retested those levels not seen since 2007, now may well be the time to take something of a reality check,” said Fawad Razaqzada, market strategist at GFT Markets.
In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 6,325 while Germany’s DAX fell 0.2 percent to 7,821. The CAC-40 in France was also 0.2 percent lower at 3,766.
Wall Street was poised for very modest gains at the open, with both Dow futures and the broader S&P 500 futures up 0.1 percent.
The focus won’t just remain on the U.S. this week. European matters will garner attention, not least in Italy, where the upcoming election is proving to be a closer race than many people had thought. Spain is also generating concern as the government is increasingly embroiled in a corruption scandal. Both countries are seen to have made progress in their struggles over their public finances.
The European Central Bank is meeting this week as well. Though no change in policy is expected, many investors will be interested to hear what its president, Mario Draghi, thinks about the strength of the euro. Though its advance in recent weeks is a sign of optimism over the currency’s future following a seeming easing in financial market worries over Europe’s debt crisis, it potentially makes life more difficult for the eurozone’s exporters and that could delay a recovery from recession.
On Monday, the euro edged 0.4 percent lower at $ 13583.
Earlier in Asia, Japanese stocks continued to gain ground alongside the falling yen, which is expected to help the country’s big exporters. The Nikkei 225 closed 0.6 percent higher at 11,260.35.
The yen has been falling over the past few weeks as the new government focuses on getting a moribund economy going again. As part of that drive it has asked the Bank of Japan to do more and that’s probably going to mean an expansion of the money supply.
“The ongoing shift to more aggressive monetary easing by the BoJ has helped accelerate the sell off for yen,” said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi UFJ.
The dollar was up a further 0.4 percent against the yen on Monday, to 93.16 yen.
Elsewhere, Hong Kong’s Hang Seng fell 0.2 percent to 23,685.01 while South Korea’s Kospi edged down 0.2 percent to 1,953.21.
Oil prices drifted lower with the benchmark New York rate down 46 cents at $ 97.31 a barrel.
Economy News Headlines – Yahoo! News
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