Investors step back before key US vote

Equities sell-off is easing

A GLOBAL equities selloff that spurred the biggest drop in shares since Donald Trump’s election eased as investors stepped back before a key US vote on health care. The yen halted a seven-day rally and gold retreated.

European and Japanese shares were little changed while Australian and South Korean stocks rose after the S&P 500 Index nudged higher.

Treasury 10-year yields were steady after four days of losses. The kiwi was flat after New Zealand’s central bank kept its benchmark rate at a record low 1.75 percent. Oil futures climbed.

The gains in US equities provided a measure of calm to the market after a sell-off spread across Asia on Wednesday. Volatility spiked before a Republican health-care bill is set for a vote in Congress.

Lawmakers have signalled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election in November.

The depth of selling drew some investors back in on speculation that the drop went too far given data showing strength in the global economy.

The sell-off was the biggest for stocks since the November election. Equities had largely escaped investors’ efforts this year to unwind so-called Trump trades. While the dollar has fallen 4.4 percent from a January peak, global stocks have climbed to new highs, with the MSCI All Country World Index reaching a record last week.

PHOTO: AP An electronic stock indicator in Tokyo yesterday. Shares were modestly higher in Asia after Wall Street steadied overnight. Investors are awaiting a vote in the US Congress on health-care legislation.