Stocks Tread Water as Investors Watch for Saudi Developments -- 3rd Update

By Mike Bird and Ese Erheriene Features Dow Jones Newswires

Global stocks were roughly flat Monday, with investors keeping a close eye on developments in U.S. tax-reform plans and a wave of arrests in Saudi Arabia as part of a corruption crackdown.

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The Stoxx Europe 600 index was down 0.01% shortly after European markets opened, driven by a 0.2% fall in France's CAC 40 index.

Oil prices climbed to the highest levels in over two years in the wake of a series of arrests in Saudi Arabia of princes, businessmen and government ministers.

As trading began in Europe, West Texas Intermediate crude oil was up by 0.9% at $56.13 a barrel, a level last reached in 2015. Brent crude oil was up 0.7% at $62.50 a barrel.

In Asia, Hong Kong's Hang Seng Index fell by as much as 1.6% earlier in the session, before reversing losses to trade roughly flat as European bourses opened.

Some market participants credited political unrest in Saudi Arabia with sparking short-lived investor jitters in Hong Kong.

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"Hong Kong didn't get a chance to respond to the situation over the weekend [and] everything risky in the overseas market affects Hong Kong more than in other Asian markets," said Hao Hong, head of research at BOCOM International.

Comments from China's central bank Governor Zhou Xiaochuan about rising risks to China's financial system reignited worries of a crackdown on leverage on the mainland, according to Ivan Ip, a stocks strategist at UOB Group.

Mr. Zhou wrote in an article posted Saturday on the website of the People's Bank of China that the risks of China's financial system are increasing. He described the risks as being "hidden, complex, sudden, contagious and hazardous."

Elsewhere in the region, Japan's Nikkei Stock Average reversed early gains, as traders returned after a three-day weekend. The index closed up 0.04%.

The yen pared early sharp declines against the U.S. dollar, when Bank of Japan Governor Haruhiko Kuroda said the central bank would be patient about easing. The dollar was last up 0.2% at Yen114.26 after earlier hitting an intraday high of Yen114.73.

The WSJ Dollar Index which measures the greenback against a basket of international currencies, was roughly flat.

Kenan Machado

contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

November 06, 2017 03:54 ET (08:54 GMT)