Global stocks edged lower in volatile trade Thursday, with investors now waiting for a new catalyst to set a direction.
The Stoxx Europe 600 was down 0.5% around midday, weighed down by a fall in banking shares. Futures pointed to a 0.6% opening loss for the S&P 500. Changes in futures aren’t necessarily reflected in market moves after the opening bell.
Earlier Thursday, European markets inched up following an unexpected decline in U.S. crude stockpiles Wednesday that pushed Brent crude sharply higher. The higher oil price had supported Asian markets earlier, but a fall in crude in European trading put pressure on the region’s stocks.
Brent crude, the international benchmark, was down 0.10% at $39.82 in choppy trade.
“What you’ve seen so far year-to-date is a lot of volatility in the market,” said Blake Crawford, a portfolio manager at J.P. Morgan Asset Management. “At the moment, people are waiting for a catalyst to push markets one way or another.”
Stock markets have struggled for direction this month following a sharp rally that began in mid-February on easing concerns over the global economy and support from central banks.
Thursday’s moves came after the U.S. Federal Reserve released minutes from its March policy meeting Wednesday that showed officials were unlikely to raise interest rates in April.
“There’s been an almost perpetual rotation of themes in the market since the start of the year. It has been very hard to hang your hat on what’s been happening as far as trends were concerned,” said Tim Crockford, fund manager at Hermès Investment Management.
In currency markets, the dollar fell 1.3% against the yen, reaching a level last seen in late 2014. Lower interest rates tend to reduce the appeal of a currency to investors. But the yen now sits at 108.3 to the dollar, down from over 120 at the turn of the year.
In Europe, many investors remain hopeful that the European Central Bank will help stimulate the region’s markets. The euro was flat at $1.139, after an earlier fall against the dollar following the ECB’s chief economist Peter Praet’s suggestion that the bank could launch additional stimulus.
Shares in European banks, which may suffer if the ECB decided to push interest rates further into negative territory, were down almost 2%.
Mr. Crawford, though, said the ECB’s readiness to ease monetary policy further is one of the main reasons that he is positive about European stocks. Low interest rates have supported stock markets in recent years.
Chris Jeffery, an asset-allocation strategist at Legal & General Investment Management, said stocks are likely to remain range-bound for the foreseeable future, provided the U.S. economy doesn’t fall into recession.
“We think equities returns are going to be predicated on earnings growth, and we don’t see a lot of that,” said Mr. Jeffery.
In Europe, losses among banking shares were offset by gains in the health-care stocks, after the sector in the U.S. was lifted by the termination of Pfizer Inc. and Allergan PLC’s planned $150 billion merger. In the first quarter, health-care was one of the worst performing sectors
Chinese stocks slipped Thursday, amid worries about the imminent expiration of temporary restrictions on large shareholders selling domestic stocks.
The Shanghai Composite Index was down 0.8% at 3027.47. Elsewhere in Asia, the Nikkei Stock Average fell 0.3%, and South Korea’s Kospi posted a 0.2% loss. Australia’s S&P/ASX 200 was up 0.3%, helped by gains in energy shares.
Gold was up 1.2% in London, mainly on the back of a weaker dollar.
