Shares slip ahead of Fed, investors eye Russia-Ukraine

Wed Mar 19, 2014 5:35am EDT
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By Jamie McGeever

LONDON (Reuters) - Stock markets slipped on Wednesday, while major bond and currency markets held steady ahead of a U.S. Federal Reserve policy decision later in the day and as military tensions between Ukraine and Russia ratcheted up.

British financial markets largely followed that pattern although sterling recovered some recent losses before a raft of potentially market-moving news including the government's annual budget, Bank of England minutes and unemployment data.

Europe's major stock markets were down as much as a third of one percent in early trading, following Asian shares lower after the the MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.2 percent.

Underlying worries over China's financial and property sectors bubbled to the surface, pushing Chinese stocks lower .SSEC and the yuan to its weakest level in a year through 6.20 per dollar.

This is the first time the yuan has traded more than 1 percent beyond the midpoint set by the central bank after the daily trading band was widened to 2 percent.

Global investors' main focus, however, remain the Fed and Russia.

"I expect gradually the focus to shift away from the tensions between Russia and the West, unless we see actual violence or some type of events other than sanctions that would be seen as an escalation," Jan von Gerich, chief strategist at Nordea in Helsinki, said.

Earlier, pro-Russian units took control of part of a naval base in Ukraine, in the clearest sign so far that Russian soldiers and volunteers who support them had begun to take control of Ukrainian military facilities across the Black Sea peninsula.   Continued...

An employee of a foreign exchange trading company looks at monitors in Tokyo March 18, 2014. REUTERS/Toru Hanai