published Nov 28th 2016, 4:54 pm, by Emma O’Brien

(Bloomberg) —
The global equity rally is petering out, with index futures signaling losses in Asia following U.S. benchmarks’ retreat from record highs. Haven assets maintained gains as the focus shifted from Donald Trump’s election win to fresh threats to market stability.

Futures on indexes from South Korea to China foreshadowed declines as the S&P 500 Index was toppled from its all-time high. Japanese futures were also lower, raising the prospect the country’s Topix index will end its longest run of gains in almost 1 1/2 years. The yen strengthened for a third session and the euro held gains after concern over Italy’s forthcoming referendum on constitutional reform sank European bank stocks. Gold held gains following its steepest two-day advance since the start of November as Australian bonds rose. Oil neared $47 a barrel Monday before this week’s OPEC meeting.

Trump’s surprise victory spurred a rally in the dollar, industrial metals and developed-market stocks as his pledge to boost infrastructure spending buoyed optimism over the world’s biggest economy, weighing on haven investments. With politics looming large on the market’s radar, investors are now pivoting to the OPEC meeting and the Italian vote at the weekend, with the threat of ructions in the banking system and Prime Minister Matteo Renzi’s resignation should the ‘No’ campaign prevail. Oil bounced Monday as Iraq’s oil minister said the nation will cooperate with the Organization of Petroleum Exporting Countries to reach an agreement to stabilize the oversupplied market.

“While financial markets might be starting to look for new drivers, politicians and policy makers remain very much in the driver’s seat,” Con Williams, a rural economist in Wellington at ANZ Bank New Zealand Ltd., said in a client note. “Oil continues to gyrate with headlines surrounding OPEC. Expect volatility to persist with the meeting in Vienna starting Wednesday.”

Japan updates its jobless rate and reports on retail sales Tuesday, while Sri Lanka reviews benchmark interest rates. South Korea issues data on store sales and the Philippines reports on money supply and bank lending.

Stocks

New Zealand’s S&P/NZX 50 Index, the first to start trading, was little changed as of 7:43 a.m. Tokyo time, following a four-day rally. Futures on equity gauges in Australia, South Korea and the FTSE China A50 Index slipped at least 0.1 percent, while Nikkei 225 Stock Average futures were down 0.2 percent to 18,290 in Osaka. Contracts on Hong Kong’s Hang Seng and Hang Seng China Enterprises indexes rose 0.01 percent and 0.1 percent respectively. The S&P 500 fell with the Dow Jones Industrial Average and the Russell 2000 Index from an all-time high Monday, losing at least 0.3 percent as bank stocks led losses.

To contact the reporter on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net To contact the editors responsible for this story: Emma O’Brien at eobrien6@bloomberg.net Andreea Papuc

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