NEW YORK, :Global equity markets traded lower on Monday as investors hedged their positions amid rising geopolitical tensions and uncertainty over the U.S. presidential election, even as gold prices reach new highs.
The Israeli military is continuing its attacks against Lebanon’s Hezbollah militant group, with hundreds of Beirut residents fleeing their homes late on Sunday as explosions rocked the Lebanese capital. Gold prices surged to a record high on Monday and were up 0.07 per cent to $2,722.23 an ounce.
All three main Wall Street indexes were trading lower, with defensive stocks, including real estate and healthcare stocks, among the leading drags on the benchmark S&P 500 index.
The Dow Jones Industrial Average fell 0.74 per cent to 42,956.04, the S&P 500 fell 0.18 per cent to 5,841.10 and the Nasdaq Composite fell 0.16 per cent to 18,459.62
The European shares index lost 0.66 per cent, while MSCI’s gauge of stocks across the globe fell 0.55 per cent. Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.7 per cent lower.
“Between the combination of escalating or still-high Middle East tensions, and we’re only a handful of days away from the (Nov. 5 U.S. election), it could be that the market is getting nervous ahead of that and people are squaring some of their positions,” said Wasif Latif, president and chief investment officer at Sarmaya Partners.
Oil prices gained following a more than 7 per cent drop last week. Brent crude futures were last up 1.57 per cent at $74.21 a barrel, while U.S. West Texas Intermediate crude futures rose 2 per cent to $70.65.
Markets are pricing in a 86.7 per cent chance for a cut of 25 basis points (bps) at the Fed’s November meeting, with an 13.3 per cent chance of the central bank holding rates steady, according to CME’s FedWatch Tool. The yield on benchmark U.S. 10-year notes rose 10.3 basis points to 4.178 per cent.
The dollar climbed, buoyed by a rise in U.S. bond yields. The euro was down 0.43 per cent at $1.0818, while the pound weakened 0.51 per cent to $1.2982. Against the Japanese yen, the dollar strengthened 0.66 per cent to 150.5.
The European Central Bank (ECB) last week cut rates for the third time this year. Data on Monday showed German producer prices fell more than expected in September.
The dollar index, which tracks its performance against a basket of currencies including the yen and the euro,rose 0.45 per cent to 103.92.
