Markets mark time, wait on OPEC, Fed

LONDON — Global stock markets marked time on Wednesday against a backdrop of recent massive gains, growing China-US tensions, fresh virus flare-ups and signs of a possible breakthrough in deadlocked US stimulus talks, dealers said.

Oil was in focus ahead of US stockpiles data and a virtual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies to discuss their recent output cuts after crude prices were shattered by a coronavirus-driven plunge in energy demand.

The dollar, which on Tuesday hit the lowest level against the euro in more than two years on the prospect of more huge US stimulus, was little changed as the market waited on the Federal Reserve's minutes from its latest policy meeting.

"As for the oil market, traders are a bit cautious today because of the US crude inventory data" amid a supply glut, noted Naeem Aslam, chief market analyst at Avatrade.

"Traders are also keeping an eye on the OPEC+ gathering."

Wall Street highs 

On Tuesday, upbeat US data helped drive the S&P 500 to another record while the Nasdaq also pushed to an all-time high thanks to a surge in demand for tech stocks that are benefiting from lockdowns.

After Asian markets were mixed overnight, European markets were slightly firmer as Wall Street opened little changed.

Democrats and Republicans remain stalemated over what should go into another virus stimulus package but House Speaker Nancy Pelosi provided a ray of hope by saying her party could be willing to make cuts to its offer to seal a deal, then return to thrash out other issues after November's elections.

The $3.5 trillion package agreed earlier this year, combined with a wall of cash and loose monetary policies from the Federal Reserve (Fed), have helped US stock markets soar from their March troughs.

US-China woes 

Souring US-China relations remain a concern, with the latest salvo out of Washington coming in a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed new rules that could see these firms de-listed. 

The announcement comes with the two superpowers locked in several stand-offs ranging from Hong Kong, trade and the coronavirus, and US accusations of digital espionage.

There is also some trepidation about a trade pact signed between the two in January, which observers say is the crucial issue, with any sign that it could be in peril likely to spark another sharp market drop.

But while talks on the deal were called off last weekend, there is a general feeling that both sides still want to keep it in place.