European Shares Hold Steady After Manchester Bombing

European stocks were little changed Tuesday, while the British pound weakened slightly, as investors reacted to the news of a deadly explosion in the U.K.

The blast at an Ariana Grande concert in Manchester late Monday, which British police were treating as a terrorist attack, left at least 22 people dead. Such attacks in the Western world have tended to have a limited impact on financial markets in recent times.

The British pound slipped 0.3% against the euro on Tuesday and 0.2% against the dollar. Typical havens rose slightly, meanwhile, with government bond prices edging up and the Japanese yen rising 0.2% against the U.S. dollar.

In equity markets, the Stoxx Europe 600 was flat in early trade after Asian bourses mostly ended lower.

The U.K.'s FTSE 100, which tends to gain when sterling declines due to the large amount of companies in the index with revenues that come from abroad, rose 0.1%.

U.S. futures pointed to a flat opening for the S&P 500 after the benchmark index ended higher for a third straight session on Monday on the back of gains for technology and industrial stocks.

U.S. stocks have bounced back from a sharp decline midway through last week that came amid concerns that political turmoil in Washington could derail President Donald Trump's agenda. Some analysts said those concerns have eased in recent sessions thanks to a strong corporate earnings season and robust underlying economy.

"The reflation trade is evolving, but not ending. Yes we have some political noise, but the company fundamentals remain pretty supportive," said Jean Medecin, a member of the investment committee at Carmignac.

"In this environment we believe we are in a 'buy the dip' market," he added.

In Europe, gains in technology stocks helped offset declines in mining and real-estate stocks. That followed strong gains for U.S. technology stocks on Monday.

Asian markets were broadly lower, with Japan's Nikkei Stock Average down 0.3% and Australia's S&P/ASX 200 falling 0.2%.

The largest declines came in China, where investors have been concerned about the pace of initial public offerings--about 10 a week.

The Shanghai Composite Index was down 0.5%, while the Shenzhen Composite Index fell 2.1%.

In commodity markets, oil prices dipped slightly after hitting their highest level in a month in the previous session. Brent, the global benchmark, was trading down 0.9% recently at $53.41 a barrel. Market participants are looking ahead to the meeting this week of the Organization of the Petroleum Exporting Countries.

In debt markets, political uncertainty in the U.S. linked to the Trump administration could delay a rise in bond yields, said Naka Matsuzawa, chief Japan rates strategist with Nomura. Yields moves inversely to prices.

The yield on the 10-year Treasury note declined from 2.254% to 2.237% Tuesday, according to Tradeweb.

Bond investors will likely react to forthcoming economic data releases, including new-home sales for April due out later Tuesday, as well as durable goods orders and revised gross domestic product growth figures for the first quarter on Friday. Investors are also looking ahead to the release of Federal Reserve meeting minutes on Wednesday.

Suryatapa Bhattacharya contributed to this article.

Write to Christopher Whittall at and Ese Erheriene at

(END) Dow Jones Newswires

May 23, 2017 03:48 ET (07:48 GMT)