LONDON (Reuters) - World stocks retreated on Wednesday from one-month highs, with investor focus turning from the U.S.-North Korea summit to an expected U.S. interest rate rise and the risk of a fresh outbreak of trade tensions between China and the United States.
Global tech stocks approached record highs and Italian yields fell, although markets remain under pressure from U.S. plans for extra tariffs on $50 billion worth of Chinese goods. The Mexican peso and European auto stocks, also vulnerable to trade-war risk, slipped further.
Equity markets are “marking time and finding it difficult to make upward progress despite reasonably good economic data”, said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.
“We are entering three days of important central bank decisions. Markets have pretty much priced what (the banks) will do and it is clear we are in a monetary policy tightening cycle,” Milligan said.
The U.S. Federal Reserve is expected to announce a 25-basis-point rate increase, this year’s second. The European Central Bank and the Bank of Japan also meet this week.
Tuesday’s meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un has soothed some geo-political fears, as a joint statement pledged to work toward the “denuclearization” of the Korean Peninsula.
That, alongside a buoyant picture on company earnings and M&A deals, helped Wall Street close on a strong note on Tuesday, with tech stocks hitting record highs .IXIC .SPX
But trade frictions between the United States and China pushed non-Japan Asian equities half a percent lower .MIAPJ0000PUS and took MSCI’s all-country share index 0.2 percent lower .MIWD00000PUS.
European equities
