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GLOBAL MARKETS-European stocks claw back ground as markets steady
May 27, 2013 / 7:45 AM / 4 years ago

GLOBAL MARKETS-European stocks claw back ground as markets steady

* Markets wary after last week’s volatility

* Nikkei down 3 pct but above 50-day moving average

* Euro shares inch higher, UK, U.S. markets closed for holidays

* Oil dips back towards $102 a barrel

By Marc Jones

LONDON, May 27 (Reuters) - European stocks, bonds and the dollar traded in a calmer fashion on Monday after last week’s turbulence, though another three percent dive in Japan’s Nikkei kept investors on edge.

Last week’s shakeout of equity, bond and currency markets was triggered by concerns the U.S. Federal Reserve could wind in its support sooner that had been expected, weak China data and doubts over how low Japan will allow the yen to go.

With UK and U.S. markets both closed for public holidays, European equity and bond markets saw a quieter than usual start to the week.

The FTSEurofirst 300 index of top European shares started up 0.3 percent as last week’s falls tempted buyers, while demand for safe-haven 10-year German government bond futures eased.

The dollar was also steadier, though it dipped to 101.00 against the yen as the latest steep fall in Japanese equities saw investors continue to unwind their dollar hedges and head for bonds. The euro was little changed at $1.2940.

“Markets are currently experiencing difficulty fully and precisely understanding both the pace of global growth and the implications of central banks’ activism,” Credit Agricole said in a note.

“Expectations cannot remain stable for long and so investors should be prepared for periods of higher volatility in particular asset classes,” they added.

In commodity markets, Brent crude slipped towards $102 per barrel, extending last week’s 2 percent drop, as a weak economic outlook in a well-supplied market pressured prices. The broader market nerves also helped gold firm as it looked to build on last week’s best run in a month.

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