* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, April 12 (Reuters) - Global stock markets sank on
Monday as investors waited to see whether U.S. earnings would
justify sky-high valuations, while a rally in bonds could be
tested by what should be strong readings for U.S. inflation and
retail sales this week.
MSCI's All Country World Index .MIWD00000PUS , which tracks
stocks across 49 countries, was down 0.25% after the start of
European trading, off Friday's record high.
European shares eased off record highs as investors held off
from making big bets before earnings season. The pan-European
STOXX 600 index was down 0.3% by 0813 GMT. .EU
Britain's domestically focused FTSE mid 250 index .FTMC
slipped 0.6%, but held below a record high as shops, pubs, gyms
and hairdressers re-opened after three months of lockdown.
The UK's more export-oriented FTSE 100 fell 0.9%, Germany's
DAX slipped 0.1% and France's CAC 40 .FCHI fell 0.2%. Italy's
FTSE MIB was the sole gainer, up 0.05%. .FTSEMIB
The VIX volatility index, also known as Wall Street's "fear
gauge", ticked slightly higher to 17.44, having hit its lowest
level since March 2020 on Friday. .VIX
"The drop indicates that investor sentiment is improving
amid a perception of receding market risk," strategists at BCA
Research said in a note to clients. "This progress is in line
with other market developments: the S&P 500 is forging all-time
highs and Treasury bond yields have been climbing since August,
buoyed by the improving economic outlook."
Earlier in Asia, Tokyo's Nikkei .N225 edged down 0.6%.
South Korean stocks .KS11 were near flat.
The Nifty 50 index .NSEI slid 2.4% as India overtook
Brazil to become the country with the second most COVID-19
cases. Chinese blue chips .CSI300 lost 1.5% before a series of
economic figures from the country.
Shares in Alibaba Group Holding Ltd 9988.HK BABA.N rose
16% after China imposed a record 18 billion-yuan ($2.75 billion)
fine on the e-commerce giant. Over a third of the stock is held
by U.S. investors, and it makes up more than 8% of the MSCI EM
index. Nasdaq futures NQc1 slipped 0.1% on Monday. S&P 500
futures fell 0.2% ESc1 .
Growth and tech stocks saw something of a revival last week
as U.S. 10-year Treasury yields retreated to 1.65%
US10YT=TWEB , from a 14-month top of 1.776%.
Over the weekend, Federal Reserve Chair Jerome Powell said
the economy was about to start growing faster, though the
coronavirus remained a threat.
Data out this week are expected to show U.S. inflation
jumped in March. Retail sales are seen surging, perhaps even
with a double-digit gain. Treasury is also set to test demand
with offers of $100 billion in debt this week.
"Recent economic data from the U.S. has reinforced the
reflation narrative, with the strongest ISM Services survey
since 1997 and positive signals from the labor market," said
Mark Haefele, chief investment officer at UBS Global Wealth
Management.
"We also expect a pickup in European growth as vaccination
programs ramp up. Still, as pent-up demand meets supply
constraints, a pickup in inflation could well unsettle
investors."
U.S. banks open first-quarter earnings season this week with
Goldman Sachs GS.N , JPMorgan JPM.N and Wells Fargo WFC.N
scheduled to report on Wednesday.
Analysts expect profits for S&P 500 firms to show a 25% jump
from a year earlier, according to Refinitiv IBES data. That
would be the strongest performance for the quarter since 2018.
The pullback in yields was enough to see the dollar come off
the boil last week. It was last trading at 92.254 =USD against
a basket of currencies, down from a peak of 93.439.
It was lower against the yen at 109.39 JPY= . The euro was
holding at $1.1879 EUR= and above its recent trough of
$1.1702.
Gold prices were idling at $1,737 an ounce XAU= , having
failed to sustain a top of $1,758 last week. GOL/
Oil prices fell around 2% last week as production increases
and renewed COVID-19 lockdowns in some countries offset optimism
about a recovery in fuel demand. O/R
Brent LCOc1 was 0.1% lower on Monday at $62.93 a barrel.
U.S. crude CLc1 fell 0.2% at $59.22.
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Global asset performance http://tmsnrt.rs/2yaDPgn
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