* MSCI global equity gauge slips from near-record highs
* Euro STOXX 600 flat after opening lower
* Wall Street set to open lower
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates prices, adds euro zone inflation)
By Tom Wilson
LONDON, Nov 29 (Reuters) - World shares slipped on Friday as
a leading index strained for a record high, with investor nerves
from Asia to Europe gnawing away over how or when the United
States and China can agree a truce in their damaging trade war.
The MSCI All Country world index .MIWD00000PUS , which
tracks shares in 49 countries, fell 0.2% to 548.48 points, short
of a record 550.63 scaled in January 2018 before the eruption of
tensions over trade between Washington and Beijing.
European shares clawed back some ground after opening lower,
but by late morning, the broad Euro STOXX 600 .STOXX was down
0.1%, still near a four-year high.
Asia saw a sombre session, with MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS falling 1.1%.
Hong Kong .HSI led the dip, losing 2.1%. South Korean
shares .KS11 and Japan's Nikkei .N225 also fell.
China's blue-chips .CSI300 gave up 0.9% a day before the
country reports manufacturing activity, which analysts expect to
have shrunk for seventh straight month in November. The sell-off came as investors grew uncertain over how U.S.
markets will perceive the latest clash between Washington and
Beijing over Hong Kong.
Wall Street will start a half-day session on Friday
following Thursday's Thanksgiving holiday, with futures gauges
ESc1 suggesting losses of around 0.2%.
China warned the United States on Thursday it would take
"firm counter measures" in response to U.S. legislation backing
anti-government protesters in Hong Kong. "The more recent news on the trade front is how the Hong
Kong situation might play into the U.S.-China trade
negotiations," said Hugh Gimber, global market strategist at
J.P. Morgan Asset Management.
"The market is now waiting on the next clear steer on when
investors might be able to expect a deal to be reached."
Markets rose through October and in November began to price
in expectations of the two sides reaching an initial deal by the
year-end, Gimber said, adding that has started to look less
likely.
Still, investors are on the whole betting it ultimately
remains in the interest of both Washington and Beijing to move
forward with talks to get a trade deal.
The MSCI world index has climbed 2.5% this month, its third
straight month of gains, helped in part by hopes the world's two
biggest economies are moving towards a resolution. The trade
conflict has upset financial markets and disrupted supply
chains.
For the year, the index is up over 20% this year, helped by
a lowering of interest rates and injections of government
stimulus around the world.
In holiday-thinned trade, euro zone inflation data was the
main piece of economic data in investors' sights.
The data showed inflation accelerated faster than expected
in November, likely comforting European Central Bank
policymakers - even if some factors pushing up prices may be
only temporary. The ECB will next meet on Dec. 12, with its loose policy
stance not expected to change for months to come.
Benchmark bonds in the bloc, including Germany's 10-year
Bund yield DE10YT=RR , were little changed, trading off
one-month lows hit the previous session.
QUIET ON THE DOLLAR FRONT
With few major news catalysts in the China-U.S. trade talks,
major currencies stayed in tight trading ranges.
Against a basket of six major currencies, the dollar .DXY
traded flat at 98.387, and edged up slightly against the
Japanese yen.
In early London trading, the greenback reached 109.55 yen
JPY= , not far off a six-month peak of 109.61 set on Wednesday.
"China has already threatened retaliation measures in
reaction to the bill being passed, while it remains unclear for
now what shape these will take," said Thu Lan Nguyen, a
strategist at Commerzbank. "That means there is still the risk
of a set-back short term."
The euro stood at $1.1005 EUR= , and has been stuck in a
tight range for the past week.
As trading in major currencies slumbers, their implied
volatilities, key gauges of expected swings measured by their
option prices, plumbed record lows this week.
Elsewhere, bitcoin BTC=BTSP gained 1.5%, with the original
cryptocurrency on course for its worst month in a year.
Bitcoin had been heavily sold off by investors as
expectations fade that China's embrace of blockchain would help
cryptocurrencies enter the mainstream.
Oil prices dipped, with investors awaiting a meeting of OPEC
and its allies next week. OPEC watchers expect an extension to a
pact to throttle oil output but no deeper cuts to be agreed by
the producer group and its allies next week.
Brent crude futures LCOc1 were down 44 cents, or 0.7%, at
$63.43 a barrel.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/
MSCI ACWI, MSCI AXJ Nov 29 2019 https://tmsnrt.rs/2XX6DXk
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