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GLOBAL MARKETS-Dollar gains, global stocks slip as tech weighs

Published 2021-03-30, 12:31 p/m
© Reuters.

(Adds byline; changes dateline; previous LONDON)

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Herbert Lash

NEW YORK, March 30 (Reuters) - The dollar rose and a gauge of global equity markets slipped on Tuesday as rising U.S. Treasury yields dampened the appeal of the U.S. tech sector and led investors on both sides of the Atlantic to shares that stand to benefit as economies re-open.

The stronger dollar and rising yields, along with expectations of a strong economic recovery, sapped demand for safe-haven bullion and pushed gold prices lower.

European shares headed toward record highs on hopes of a vaccine-driven recovery as investors looked past the fallout of U.S. hedge fund Archegos' default, which slammed banking stocks on Monday.

The STOXX 600 index .STOXX gained 0.7%, putting the pan-European index less than 1% from its pre-pandemic peak, while bank and mining stocks pushed the blue-chip FTSE 100 index .FTSE in London to close up 0.5%.

Apple Inc AAPL.O , Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O led the S&P lower, while JPMorgan (NYSE:JPM) & Co. JPM.N and Bank of America (NYSE:BAC) BAC.N were the benchmark's top advancing stocks.

The major U.S. stocks indexes fell, but advancing shares outnumbered declining issues, a sign of the impact the big tech stocks have both on Wall Street and MSCI's benchmark for global equity markets.

The MSCI all-country world index .MIWD00000PUS fell 0.19% to 671.58, while its index for emerging markets stocks .MSCIEF rose 0.69%.

The Dow Jones Industrial Average .DJI fell 0.44%. The S&P 500 .SPX lost 0.45% and the Nasdaq Composite .IXIC dropped 0.29%.

Bets on a speedy economic recovery driven by the vaccine rollout and unprecedented stimulus lifted the S&P 500 and the Dow to notch record closing highs last week.

The dollar climbed to a one-year high against the yen and rose against major currencies on the increasing distribution of U.S. vaccines and President Joe Biden's plans to spend up to $4 trillion on infrastructure. is expected on Wednesday in Pittsburgh to announce his plan, details of which spurred yields higher on concerns the spending could push up the government deficit, said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities.

"That, I think, is weighing on markets," Goldberg said, adding that investors have yet to fully size up the possibility of a multi-trillion-dollar package. "There's more upward pressure on rates to come."

The 10-year U.S. Treasury US10YT=RR note rose 1 basis point to yield 1.7331%.

The dollar index =USD rose 0.425%, with the euro EUR= down 0.39% to $1.1716. The Japanese yen JPY= weakened 0.45% versus the greenback at 110.28 per dollar.

The rally in European shares to near record highs and signs of a pick-up in inflation in big euro zone economies weighed on euro area bonds, pushing 10-year yields up 4 to 5 basis points across the board.

Spot gold prices XAU= fell 1.61% to $1,684.39 an ounce.

Oil prices slid as the Suez Canal reopened to traffic, while focus turned to an OPEC+ meeting this week that analysts expect will approve an extension to supply curbs amid disappointing demand prospects.

Brent crude futures LCOc1 fell $1.01 to $63.97 a barrel. U.S. crude futures CLc1 slid $1.21 to $60.35 a barrel.

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