World shares stepped back from three-week highs on Thursday, ending a five-day run of gains fuelled by assurances from major central banks their supportive policies would continue.
In Europe, the fading momentum was compounded by political uncertainty in Italy, where Prime Minister Enrico Letta defied pressure to make way for the centre-left leader Matteo Renzi.
The stand-off threatens to pull apart a coalition government patched together after last year's deadlocked elections. That would further hamper efforts to turn around the country's sputtering economy.
Italian stocks <.FTMIB> led the losses among the region's bourses <.FTEU3>, dropping as much as 1.2 percent. The country's government bondswere the worst performers on the debt market.
"Right now, you are not sure which (political) scenario will be in play and some of the scenarios could lead to inaction," said UniCredit strategist Luca Cazzulani in Milan.
A batch of disappointing updates from blue-chip companies in Europe also weighed on the region's stock markets but it was the rumblings in Italy that remained the central focus. [.EU]
There was no signs of trouble in a 7.5 billion-euro auction of Italian 3- to 30-year bonds . But the relief was short-lived - stocks and bonds in Milan remained rooted to the bottom of the European table.
Letta, a low-key moderate appointed to lead the cross-party coalition formed after last year's deadlocked elections, is fighting for his political future amid growing criticism from Renzi over the slow pace of economic reform.
A meeting of the 140-strong leadership committee of the Democratic Party at 3 p.m. (1400 GMT) will decide whether he has the backing of his party or will be forced out less than a year after taking office.
EMERGING CONCERNS
Among still-jittery emerging markets, Ukraine's ongoing woes saw the hryvnia and its sovereign bonds tumble. In Nigeria, Africa's second-biggest economy, fresh government sackings left the nairanear a two-year low.
U.S. Treasury yields, the benchmark for global borrowing costs, added to the general pressure. They hovered near a two-week high at 2.75 percent, well above the 2.57 percent where they were trading just over a week ago. [US/]
Asian trading was also bumpy after Wall Street stumbled overnight. U.S. stocks are expected to fall roughly 0.5 percent when trading resumes later on Thursday.
Markets are still sitting on solid gains. Shares had rallied amid relief that Federal Reserve policy would continue unchanged and hints the European Central Bank may provide more support in the euro zone.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.7 percent after jumping 4.5 percent in the previous five sessions. Japan's Nikkei <.N225> fell 1.8 percent, but that too was after a 4.6 percent surge this week.
Source: Reuters
In Europe, the fading momentum was compounded by political uncertainty in Italy, where Prime Minister Enrico Letta defied pressure to make way for the centre-left leader Matteo Renzi.
The stand-off threatens to pull apart a coalition government patched together after last year's deadlocked elections. That would further hamper efforts to turn around the country's sputtering economy.
Italian stocks <.FTMIB> led the losses among the region's bourses <.FTEU3>, dropping as much as 1.2 percent. The country's government bonds
"Right now, you are not sure which (political) scenario will be in play and some of the scenarios could lead to inaction," said UniCredit strategist Luca Cazzulani in Milan.
A batch of disappointing updates from blue-chip companies in Europe also weighed on the region's stock markets but it was the rumblings in Italy that remained the central focus. [.EU]
There was no signs of trouble in a 7.5 billion-euro auction of Italian 3- to 30-year bonds . But the relief was short-lived - stocks and bonds in Milan remained rooted to the bottom of the European table.
Letta, a low-key moderate appointed to lead the cross-party coalition formed after last year's deadlocked elections, is fighting for his political future amid growing criticism from Renzi over the slow pace of economic reform.
A meeting of the 140-strong leadership committee of the Democratic Party at 3 p.m. (1400 GMT) will decide whether he has the backing of his party or will be forced out less than a year after taking office.
EMERGING CONCERNS
Among still-jittery emerging markets, Ukraine's ongoing woes saw the hryvnia and its sovereign bonds tumble. In Nigeria, Africa's second-biggest economy, fresh government sackings left the naira
U.S. Treasury yields
Asian trading was also bumpy after Wall Street stumbled overnight. U.S. stocks are expected to fall roughly 0.5 percent when trading resumes later on Thursday.
Markets are still sitting on solid gains. Shares had rallied amid relief that Federal Reserve policy would continue unchanged and hints the European Central Bank may provide more support in the euro zone.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.7 percent after jumping 4.5 percent in the previous five sessions. Japan's Nikkei <.N225> fell 1.8 percent, but that too was after a 4.6 percent surge this week.
Source: Reuters
