Global Shares Slide as Wall Street Rally Fades

Share prices were mostly lower in Europe and Asia on Wednesday as the afterglow from Wall Street’s extended winning streak faded.

In Europe, Germany’s DAX slipped 0.4% to 13,338.59 and the CAC 40 in France shed 0.2% to 5,512.71. Britain’s FTSE 100 bucked the losing trend, gaining 0.2% to 7,743.25. Wall Street looked set for a weak start, with S&P futures down 0.2% at 2,746.70 and Dow futures also off 0.2%, at 25,332.00, AP reported.

Germany’s 10-year bond yield hit its highest level since the European Central Bank in October extended and cut its bond buying scheme, as central bank speculation and heavy new debt supply across the euro zone knocked investor sentiment.

A combination of factors has pushed yields higher in recent days, with global growth and higher oil prices making investors speculate that central banks globally will tighten policy.

In Asia, Japan’s Nikkei 225 index lost 0.3% to 23,788.20 and the Kospi in South Korea lost 0.4% to 2,499.75. Australia’s S&P ASX 200 slipped 0.6% to 6,096.70. The Hang Seng index in Hong Kong climbed 0.2% to 31,073.72 and the Shanghai Composite index added 0.2% to 3,421.83. Shares fell in Taiwan and were mixed in Southeast Asia.

A drop in the scale of long-term bond purchases by the Bank of Japan on Tuesday has triggered speculation over further “tapering” of asset purchases. That pushed the Japanese yen higher against the dollar, denting some exporters’ shares.

China Inflation Data: China reported that its consumer price index edged up to 1.8% in December from 1.7% the month before, driven by higher food prices. But broader gauges showed price pressures easing. “Looking ahead, we think that food prices aside, inflation will continue to drop back in the coming quarters as economic activity softens,” said Julian Evans-Pritchard of Capital Economics.

Currencies: The dollar fell to 111.88 Japanese yen from 112.65 yen late Tuesday. The euro climbed to $1.1950 from $1.1938, and the British pound dipped to $1.3517 from $1.3540.

The Russian ruble rallied to multi-month peaks on Wednesday after the price of Brent crude rose to $70 per barrel. The ruble hit 56.76 versus the dollar in early trade on Moscow exchange, its strongest level since June 7. The ruble was 0.3 firmer at 56.82 per dollar.

The ruble gained momentum in 2018 as prices rose for oil, Russia’s key export. Amid ongoing production cuts led by OPEC and healthy demand, Brent crude futures were up 0.5% at $69.13 per barrel, hovering near levels last seen in 2014.