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GLOBAL MARKETS-Pound rallies on Brexit bets; stocks, oil fall
November 29, 2017 / 5:59 PM / 12 days ago

GLOBAL MARKETS-Pound rallies on Brexit bets; stocks, oil fall

(Updates prices; changes comment, dateline from previous LONDON)

* Crude futures volatile ahead of OPEC meeting

* Yen slips vs USD, but euro, sterling rise

* Tech drags Wall St lower, banks rally

By Rodrigo Campos

NEW YORK, Nov 29 (Reuters) - The British pound touched a two-month high versus the U.S. dollar on Wednesday as Britain and the European Union moved closer to a Brexit negotiation deal, while a tech-sector selloff weighed on Wall Street and stocks globally.

Investors moved out of technology shares into bank stocks that rose sharply after the nominee to head the Federal Reserve said some regulations could be scaled back.

“What we’re seeing is a combination of defense positioning, with people taking some profit out of the high-growth areas, technology specifically,” said Jonathan Mackay, investment strategist at Schroders.

The U.S. Senate could vote on a tax overhaul plan as early as Thursday as a procedural hurdle is expected to be passed Wednesday. The Republican plan, seen as cutting corporate taxes, is seen by some analysts as a boon for U.S. stocks.

Despite the tech selloff, the S&P 500 tech sector is up over 35 percent in 2017, by far the best performing of the 11 S&P industry sectors.

The Dow Jones Industrial Average rose 61.75 points, or 0.26 percent, to 23,898.46, the S&P 500 lost 2.53 points, or 0.10 percent, to 2,624.51 and the Nasdaq Composite dropped 91.79 points, or 1.33 percent, to 6,820.57.

The pan-European FTSEurofirst 300 index rose 0.25 percent and MSCI’s gauge of stocks across the globe shed 0.09 percent.

Emerging market stocks lost 0.60 percent.

Traders in Asian stocks were cautious over the latest missile test by North Korea and concerns at recent softness in Chinese shares.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.4 percent lower, while Japan’s Nikkei rose 0.49 percent.

Britain’s FTSE fell, lagging a broad-based rebound in European shares as the stronger sterling hurt the internationally-exposed companies in the index.

Sterling was last trading at $1.3437, up 0.76 percent on the day.

Even as the British currency hit a two-month high some investors were wary of rushing in to buy the pound until more details emerged from a EU summit on Dec 14-15.

“There is a lot of water that has to flow under this particular bridge before we see investors becoming optimistic about the pound in their portfolios,” said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

The dollar index fell 0.12 percent, with the euro up 0.17 percent to $1.1859.

The Japanese yen weakened 0.28 percent versus the greenback at 111.81 per dollar.

Bitcoin rose over $11,000 to hit a record high for the sixth day in a row after gaining more than $1,000 in just 12 hours, stoking concerns that a rapidly swelling bubble could be set to burst.

Oil futures’ prices fell in a volatile session on conflicting statements from oil ministers a day ahead of OPEC’s meeting in Vienna, as members debate the path for an extension of the group’s supply-cut agreement.

U.S. crude fell 1.59 percent to $57.07 per barrel and Brent was last at $62.90, down 1.12 percent on the day.

Benchmark U.S. 10-year notes last fell 12/32 in price to yield 2.3793 percent, from 2.337 percent late on Tuesday.

The 30-year bond last fell 38/32 in price to yield 2.8229 percent, from 2.765 percent late on Tuesday.

Spot gold dropped 0.7 percent to $1,284.20 an ounce. U.S. gold futures fell 0.90 percent to $1,283.30 an ounce.

Copper lost 0.70 percent to $6,757.50 a tonne.

Reporting by Rodrigo Campos; additional reporting by Sruthi Shankar and Rama Venkat Raman in Bengaluru, Saqib Iqbal Ahmed and David Gaffen in New York; Editing by Andrew Hay

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