World stocks stuck near 8-month peak, yen recovers
By Philip Baillie
LONDON (Reuters) - A rally in world share markets paused near eight-month highs on Monday while the low-yielding yen climbed off an earlier five-month low against the euro as investors awaited more evidence of an economic recovery before extending last week's gains further.
European banking stocks were the top losers after an auction to determine insurance payouts on Greek sovereign bonds showed investors fear for the country's financial future even after a debt restructuring and aid packages. Lingering concerns that Portugal may need to restructure its debt also kept investors cautious.
U.S. stock futures .SPc1 pointed to a lower open on Wall Street, which had their best week in three months last week after the Federal reserve gave a positive outlook for the U.S. economy.
This in turn scaled back expectations the Fed would conduct a new round of monetary policy easing, supporting the dollar broadly.
The dollar was steady against a basket of currencies on Monday. Oil prices, seen as the big risk to the global economic outlook, dipped towards $125 a barrel after gaining $3 on Friday but no new catalysts emerged to further boost risk appetite and push stocks higher.
"We think the (equity) rally has a bit more legs yet but there's no doubt that it is not going to get there in a straight line," Barclays Wealth Equity Strategist William Hobbs said.
Hobbs singled out the healthy state of many corporate balance sheets as a key factor supporting riskier assets.
"We still think the prospects for earnings growth are reasonable. Alongside this, stock markets are very inexpensive still ... and also central banks are likely to remain helpful for a while yet." Continued...