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subject U.S. Election Dominates; Oil Price Eases
By Jeremy Gaunt, European Investment Correspondent LONDON (Reuters) - Uncertainty over the U.S. presidential election hung over global financial markets on Tuesday, keeping traders cautious although equities were boosted by falling oil prices. Stocks rose in Japan and Europe and bond prices retreated. The dollar was slightly higher against the euro. U.S. oil prices drifted below $50 a barrel despite the sabotage of three main oil pipelines in northern Iraq. Speculation that a victory by Democrat Senator John Kerry could prove bearish for oil prices by changing policy contributed to a wave of profit-taking. The election otherwise kept markets edgy. Most investors have said that from a fundamental economic perspective there is little difference in who wins, with neither candidate likely to be able, or willing, to fix U.S. finances in the near term. But markets have generally been most concerned about the prospects for a long, drawn-out battle if the vote itself is not clear cut. The key threat is another contested result and drawn-out judicial process, American Express Bank said in a commentary, although it said such a scenario was unlikely. The closeness of the race, meanwhile, has left many markets unable to discount much. The currency market, for example, is mainly positioned for no clear outcome, a Reuters poll showed on Monday. STOCKS, BONDS, DOLLAR Stock markets were generally higher with the easing oil prices underpinning market sentiment. The FTSE Eurofirst 300 index was up 0.2 percent. The narrower DJ Euro Stoxx 50 index rose 0.08 percent. Continued ...
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