Investors cautious after five positive days

A five-day winning streak for global stocks ran out of steam as participants took a more cautious stance ahead of the weekend and the start of the US quarterly earnings season next week. The US government shutdown drama provided a further reason for wariness.

The underlying mood across stock markets remained broadly positive, given persistent hopes for a breakthrough in the US-China trade dispute and signs that the Fed was prepared to be “patient” with regard to further interest rate rises.

The euro spent most of the week at the upper end of its recent trading range against the dollar — briefly topping the $1.15 level — even as a series of weak data releases heightened concerns over the outlook for the eurozone economy.

Sterling sprang into life hitting its highest level since late November against the dollar, and a two-week peak versus the euro as speculation mounted that the UK would seek to delay its scheduled departure from the EU. MPs are expected to reject a withdrawal deal reached between the EU and UK in a key vote on Tuesday.

On Friday, the FTSE All World equity index was down slightly in late trade at 312.40, after rising 5.5 per cent over the previous five days. The US S&P 500 also ended the day with a marginal loss, at 2,596, but recorded a weekly gain of 2.5 per cent.

In Europe, the Xetra Dax fell 0.3 per cent and London’s FTSE 100 shed 0.4 per cent, although the region-wide Stoxx 600 index eked out a 0.1 per cent gain.

Oil prices pulled back after a strong week, with Brent crude settling 2 per cent lower on the day at $60.48 a barrel but still up 6 per cent for the five days. US West Texas Intermediate was down 1.7 per cent in late trade at $51.69. Gold was $1 higher at $1,287 an ounce.