Market update: Modest declines as markets lose momentum awaiting US jobs data on Friday

Source: Henderson Global Investors

Wall Street stocks finished lower on Monday with the Dow Jones shedding 0.5% while the S&P 500 fell 0.3%. The lower finish is despite earlier gains on encouraging economic data, which cheered equities. The Institute for Supply Management announced its index of national factory activity rose to 57.3 in November, ahead of expectations and its best showing since April 2011. However, the momentum faded in the closing hours of trading, with rally fatigue and profit taking cited as possible reasons behind the falls. Dampening sentiment further were a lacklustre retail sales update for the Thanksgiving long weekend, and sharp drops in precious metal prices, which dragged on the mining sector.

Asian bourses followed the downbeat sentiment from Wall Street, with most markets down in overnight trading on Tuesday. The standout performer though was Japan’s Nikkei 225, which rallied 0.6% as rumours of further Bank of Japan monetary stimulus sent the yen lower against the US dollar, helping export-sensitive stocks. Chinese shares also managed to close up, reversing the previous session’s losses (Shanghai Composite 0.7%). European bourses are seeing modest declines this morning, tracking the losses elsewhere. Markets also await the all-important US jobs data at the end of the week, which could provide clues on the timing of a reduction in US stimulus. At the time of writing the FTSE Eurofirst 300 and the FTSE 100 were down 0.2% and 0.3% respectively.