European stocks, U.S. stock futures dip from peaks on pandemic jitters

European stocks and U.S. index futures fell on Wednesday, and world shares retreated from recent record peaks, as markets once more grew jittery about the pandemic ahead of the half-year-end and before key U.S. jobs data later this week.

Asset markets have been buoyed over the past year by trillions of dollars of monetary and fiscal stimulus by central banks and governments around the world in response to COVID-19, while vaccination roll-outs in recent months are boosting the economic outlook.

But stocks trimmed some gains on the last trading day of the month and half-year, amid concerns about the more infectious coronavirus Delta variant first identified in India.

Indonesia, Malaysia, Thailand and Australia are all battling pandemic outbreaks and tightening restrictions, and Spain and Portugal announced restrictions for unvaccinated British tourists.

European stocks fell 1% and U.S. S&P futures dipped 0.2%.

German stocks dropped 1.4% and British shares fell 0.67%.

MSCI’s global share index fell 0.2% but was set for a fifth straight month of gains, a day after hitting an all-time high, and for a rise of more than 11% in the first half.

U.S. shares were buoyant on Tuesday after U.S. consumer confidence jumped to its highest level in nearly 1-1/2 years in June, with growing labour market optimism as the economy reopens offsetting concerns about higher inflation.

EYES ON PAYROLLS

Steven Daghlian, market analyst at CommSec in Sydney, said that following the global run-up in equities, markets were on edge ahead of Friday’s release of U.S. non-farm payrolls data that could influence Federal Reserve policy.

Economists polled by Reuters were expecting a gain of 690,000 jobs for June, up from 559,000 in May. But the variation among the 63 estimates was large, ranging from 400,000 to more than a million.

The dollar index rose 0.04% to 92.102, with the yen up 0.01% to 110.51 and the euro down 0.05% at $1.1891. Sterling was up 0.14% at $1.3854.

The benchmark 10-year U.S. Treasury note yield fell more than 2 basis points to 1.4578%, while Germany’s 10-year government bond yield also fell 2 basis points to -0.19%.

Chinese blue chips added 0.65%. Japan’s Nikkei was down 0.07%.

Brent crude rose 0.7% to $75.30 per barrel and U.S. crude jumped 1% to $73.73, after an industry report showed U.S. stockpiles fell last week. [O/R]

Spot gold lost 0.19% to $1,754.73 an ounce, putting it on course for its biggest monthly drop since November 2016. [GOL/]

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