* 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
(Changes byline, dateline, updates throughout)
By Tom Wilson
LONDON, Nov 29 (Reuters) - World shares slipped on Friday as
a leading index strained for a record high, with nerves gnawing
away from Asia to Europe over how, or when, the U.S. 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 tensions
over trade between Washington and Beijing broke out.
European shares clawed back ground after opening lower. The
broad Euro STOXX 600 .STOXX was flat after opening 0.5% lower,
still near a four-year high.
Asia had earlier endured a sombre session, with MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS falling 1.1%.
There, 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 1.3% 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 0.3%.
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 had risen through October and in November had begun
to price in expectations of the two sides reaching an initial
deal by the year-end, Gimber said, adding that situation has
started to look less likely.
Still, investors are on the whole betting that despite wild
cards such as the U.S. legislation, 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 to a trade
conflict that has upset financial markets and disrupted supply
chains.
For the year, the index up around 20% this year, helped also
by a lowering of interest rates and injections of government
stimulus around the world.
Amid a quiet day in holiday-thinned trading, investors had
their eye on euro zone flash inflation figures, due at 1000 GMT.
In early trade, euro zone 10-year bond yields were little
changed on the day. Germany's benchmark Bund yield was at minus
0.36% DE10YT=RR , off one-month lows hit during 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 98.322, and edged up slightly against the
Japanese yen.
In early London trading, the greenback reached 109.50 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 $1.1009 EUR= , and has stood 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 to record lows this week.
Elsewhere, bitcoin BTC=BTSP gained 0.4%, with the original
cryptocurrency on course for its worst month in a year. Bitcoin
has been heavily sold off as hopes fade that an embrace of
blockchain technology by China's government would see digital
money enter the mainstream.
Oil prices were little changed, with investors awaiting a
meeting of OPEC and its allies next week that may result in the
extension of an output cut agreement to support the market.
Brent crude futures LCOc1 were down 13 cents, or 0.2%, at
$63.74 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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