World Stocks Cautious While Euro Struggles

World stocks kicked off the week on a cautious note on Monday after posting a second consecutive weekly drop, and the euro struggled as traders weighed the risks of European lockdown restrictions and prospects of a faster Federal Reserve taper, Saikat Chatterjee and Tom Westbrook reported for Reuters.

Photo Insert: The euro slipped close to the 16-month low it hit on Friday.

Though equity analysts have kept their bullish European stock market recommendations, for now, investors are closely watching sectors such as travel, hotels, and banks for wider impact.

The travel and leisure index was the top decliner in early trading. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.1%. An Asian gauge was down by a similar margin.

The euro slipped 0.3% to $1.1260, close to a 16-month low hit on Friday. The common currency has been the prime mover in markets over recent sessions as investors bet that Europe's economy will lag the U.S. recovery.

On the corporate front, shares in Telecom Italia jumped 30% after KKR made a $12 billion approach to take the Italian phone group private. A telecom sub-index gained by its biggest margin since March.

Safe-haven assets such as bonds, gold, and the yen have also benefited from the recent cautious tone.

On Monday, the yield on benchmark 10-year US Treasuries was steady at 1.5600%, with the yield curve at its flattest level since the pandemic began as markets eyed nervously the prospects of a quicker unwinding of stimulus.

Safe-haven assets attracted demand. Gold found support at $1,845 an ounce. The yen hovered at 114.09 per dollar. Bitcoin was under pressure after posting its worst week in two months last week and fell 3% to $57,000.

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