GLOBAL MARKETS-Equities dip, oil slides as global risk rally stalls

By David Randall
NEW YORK, Jan 22 (Reuters) - Global equity benchmarks
slipped from record highs and oil prices dipped Friday as weaker
economic data in Japan and Europe and concerns that
newly-inaugurated U.S. President Joe Biden's stimulus plan may
face Republican opposition curbed a weeklong rally in risk
assets.
Sentiment in Europe was already more cautious after
Thursday's European Central Bank meeting, in which the bank's
message was perceived as more hawkish than expected.
The Euro STOXX 600 .STOXX was 1% weaker, heading for its
worst daily showing of the year so far, as investors digested
weaker flash PMI readings for January. Lockdown restrictions to
contain the coronavirus pandemic hit the bloc's dominant service
industry. The FTSE 100 index .FTSE slipped 0.7% as data showed
British retailers struggled to recover in December from a
partial coronavirus lockdown the previous month. Republicans in the U.S. Congress have indicated they are
willing to work with Biden on his administration's top priority,
a $1.9 trillion U.S. fiscal stimulus plan, though some are
opposed to the price tag. Democrats took control of the U.S. Senate on Wednesday,
though they will still need Republican support to pass the plan.
"The fact that there would be U.S. stimulus was well known
and the size of the package and the very high-level details of
what they're aiming for with the package was well known some
while ago," said James Athey, investment director at Aberdeen
Standard Investments.
"The realities of what is likely to be achievable relatively
quickly are not supportive of just blindly buying cyclical
assets. There's a lot more nuance and a lot more politics to go
on before we get there."
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.59% following broad declines in Asia.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI fell 180.55 points, or 0.58%, to 30,995.46, the
S&P 500 .SPX lost 16.8 points, or 0.44%, to 3,836.27 and the
Nasdaq Composite .IXIC dropped 37.58 points, or 0.28%, to
13,493.34.
The risk-off mood followed a period of relief after the
transition of power in the United States, culminating in Biden's
inauguration on Wednesday, and strong expectations that U.S.
stimulus will provide continued support for global assets.
In currency markets, the U.S. dollar =USD gained after
three straight days of losses, though it was still on track for
its biggest weekly loss since mid-December. The dollar index
=USD rose 0.193%, with the euro EUR= down 0.04% to $1.2157.
The dollar's recent slide has been led by investors
ploughing money into higher-yielding currencies on optimism
about a rapid economic recovery led by the U.S. stimulus.
Benchmark 10-year notes US10YT=RR last rose 5/32 in price
to yield 1.0906%, from 1.107% late on Thursday.
Data from Japan overnight showed that factory activity
slipped into contraction in January and the services sector was
more pessimistic as emergency measures to combat a COVID-19
resurgence hit sentiment. In commodities, oil prices were weighed down by worries that
new pandemic restrictions in China will curb fuel demand in the
world's biggest oil importer. O/R
U.S. crude CLc1 fell 1.96% to $52.09 per barrel and Brent
LCOc1 was at $54.76, down 2.39% on the day.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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