Stocks Drop as Central Bankers Offer No Policy Clues -- 2nd Update

By William Wilkes Features Dow Jones Newswires

Stocks slipped Monday after U.S. and European central bankers didn't offer fresh policy guidance at the Jackson Hole central bankers meeting, with a stronger euro also weighing on European exporter shares.

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The Stoxx Europe 600 dropped 0.4% and futures pointed to a small opening decline on Wall Street.

Trading volume was thin as U.K. markets were closed for a public holiday.

There were "no clear policy clues from the Jackson Hole central bankers' symposium," said Rob Carnell, head of Asia research at ING, which "left investors pondering."

Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi were silent on the issue of future monetary policy at the meeting, though investors were hoping for clearer guidance.

The 10-year German bund yield traded at 0.38%, unchanged from Friday's close, while 10-year Treasurys were at 2.17%, according to Tradeweb.

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The euro largely held its ground against the dollar at $1.1935 in morning trading, having risen after Mr. Draghi gave no indication that he was worried about its recent gains.

The currency reached its highest since early January 2015 at $1.1965 overnight, according to FactSet. Commerzbank analysts say the market reaction to the speech shows Mr. Draghi "holds the key to ending the uptrend."

Shares in European export businesses were being driven lower by the stronger euro. Several German auto makers' stocks slipped and French beauty product maker L'Oréal fell 0.5%.

The dollar, meanwhile, has weakened against a basket of 16 currencies, in part due to expectations that U.S. interest rates would rise only gradually.

Asia-Pacific equity markets struggled to find direction, though China-related stocks rose on firm corporate earnings figures.

The Nikkei Stock Average was flat, constrained by a stronger yen. Stocks in China were higher, however, with the Shanghai Composite Index gaining 0.9%, driven by gains in banking stocks on expectations of solid first-half earnings.

Hong Kong's benchmark Hang Seng Index surrendered most earlier gains to finish just 15 points higher at 27,863, still a new 27-month closing high.

Singapore's Straits Times Index pared early losses to end 0.3% higher, buoyed by banking and real-estate stocks.

Australia's S&P/ASX 200 declined 0.6%, New Zealand's NZX 50 fell 0.4% and Korea's Kospi was off 0.4%.

In commodities, Brent crude traded broadly flat at $52.38 a barrel as investors monitored the impact of Hurricane Harvey in the U.S. Crude prices fell late last week on expectations that refiners' near-term demand for oil in the region will fall faster than offshore production, said investment bank OCBC.

U.S. gasoline futures jumped, however, after the storm knocked out nearly 15% of the country's refinery capacity and with further disruptions likely.

Write to William Wilkes at william.wilkes@wsj.com

(END) Dow Jones Newswires

August 28, 2017 07:32 ET (11:32 GMT)