Global stocks run out of steam on China worries

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Flare up in US-China tensions and Beijing’s plans tighten internet registration rules for younger users douse rally

Screens at the London Stock Exchange in London, the UK. Picture: BLOOMBERG/LUKE MACGREGOR

However, European stocks softened, led by a 2% drop in mining and resources firms. Bank shares also slipped, with Deutsche Bank down 5% despite forecast-beating earnings . “We have good US data in earnings which is very reassuring but valuation is very stretched in both the value as well as the growth sector,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Canada is first up later on Wednesday at 2pm GMT while the European Central Bank meets on Thursday, when Bank of Japan also concludes its two-day meeting. In fixed income markets, focus was on US short-term Treasury yields, which rose above 0.5% for the first time in 19 months. That caused the Treasury yield curve to flatten, as the possible timing of the Fed’s first interest rate rise came into tighter focus.

 

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