European, UK shares snap winning streak, silver surges

Mon Jul 4, 2016 12:14pm EDT
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By Vikram Subhedar

LONDON (Reuters) - The post-Brexit recovery across European markets sputtered to a halt on Monday with major equity indices lower and safe-haven demand for precious metals helping the price of silver surge to near a two-year high.

Financial and commodities markets in the United States were closed for the July 4 public holiday. U.S. stock futures ESc1 SPc1 were up 0.1 percent in low volumes.

Europe's Stoxx 600 .STOXX fell 0.7 percent and London'sFTSE 100 .FTSE fell 0.9 percent dragged lower by weaker financials and homebuilders' shares.

Earlier in the day, the Australian dollar recovered from wobbly start caused by political uncertainty post-election while Asian shares and base metal prices rose, partly on expectations economic stimulus from China.

JPMorgan strategists warned investors against chasing the rally in risky assets.

"We do not believe that we will see a sustained upmove.Positioning is not washed out, market internals are not positive and political uncertainty will linger," they wrote in a note.

Caution is likely to persist through the week with the Bank England scheduled to publish its quarterly financial stability report on Tuesday, the June U.S. Federal Reserve meeting minutes due on Wednesday and U.S. jobs data on Friday.

In bond markets, worries about the health of Italian banks and some 20 billion euros ($22.2 billion) of bond supply in the region this week combined to halt a post-Brexit tumble inregional borrowing costs.   Continued...

Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, July 1, 2016.     REUTERS/Staff/Remote