Equities, dollar edge up as G20 has little impact
Tuesday, 29 June 2010
LONDON, June 28 (Reuters): World shares firmed slightly after a four-day retreat Monday with investors still cautious about global economic recovery and shrugging off the rather neutral conclusion to a weekend Group of Twenty (G20) leaders' summit.
The G20 leaders meeting in Toronto agreed Sunday to take different paths for cutting budget deficits and making their banking systems safer.
Most countries had contrasting priorities, reflecting the uneven economic recovery across the globe.
Worries have risen in recent weeks that the recovery is slowing, underlined Friday by US growth data that was less robust than expected.
This has led to fears that countries such as Germany and Britain are trying to cut their deficits too soon.
"There are some legitimate doubts. Government finances in most of the mature economies are really in trouble, so we have to do something about that. But it will probably pressure growth," said Luc Van Hecka, chief economist at KBC Securities.
MSCI's all-country world stock index was up 0.2 per cent with its more risk-sensitive emerging market counterpart gaining 0.5 per cent.
The main index had four days of losses last week following a 10-session rally. It is down 7 per cent for the year-to-date, reflecting the first half's volatility over economic recovery and the euro zone's sovereign debt crisis.
European shares struggled to keep up early gains. The FTSEurofirst 300 was up 0.2 per cent.
Earlier, Japan's Nikkei slipped half a per cent, with prospects of a stronger yen weakening sentiment.
The dollar edged up after faltering in Asia on concerns about the US economic recovery and the euro remained under pressure by euro zone debt concerns.
The market showed little reaction to the G20 summit.
"It's mostly a compromise and nothing hugely material," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"The focus this week is on the recovery weakening, which is taking some upward momentum out of the dollar, most evident against the yen, as the euro remains hampered by its own issues."
The dollar was up 0.2 per cent against a basket of currencies while the euro fell 0.1 per cent to $1.2355.
Euro zone government debt yields were slightly higher.
The G20 leaders meeting in Toronto agreed Sunday to take different paths for cutting budget deficits and making their banking systems safer.
Most countries had contrasting priorities, reflecting the uneven economic recovery across the globe.
Worries have risen in recent weeks that the recovery is slowing, underlined Friday by US growth data that was less robust than expected.
This has led to fears that countries such as Germany and Britain are trying to cut their deficits too soon.
"There are some legitimate doubts. Government finances in most of the mature economies are really in trouble, so we have to do something about that. But it will probably pressure growth," said Luc Van Hecka, chief economist at KBC Securities.
MSCI's all-country world stock index was up 0.2 per cent with its more risk-sensitive emerging market counterpart gaining 0.5 per cent.
The main index had four days of losses last week following a 10-session rally. It is down 7 per cent for the year-to-date, reflecting the first half's volatility over economic recovery and the euro zone's sovereign debt crisis.
European shares struggled to keep up early gains. The FTSEurofirst 300 was up 0.2 per cent.
Earlier, Japan's Nikkei slipped half a per cent, with prospects of a stronger yen weakening sentiment.
The dollar edged up after faltering in Asia on concerns about the US economic recovery and the euro remained under pressure by euro zone debt concerns.
The market showed little reaction to the G20 summit.
"It's mostly a compromise and nothing hugely material," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"The focus this week is on the recovery weakening, which is taking some upward momentum out of the dollar, most evident against the yen, as the euro remains hampered by its own issues."
The dollar was up 0.2 per cent against a basket of currencies while the euro fell 0.1 per cent to $1.2355.
Euro zone government debt yields were slightly higher.