* Profit taking, bank worries hit stocks
* Dollar recoups some losses, weakening gold
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 24 (Reuters) - Financial markets did a quick
about-face from the previous session's patterns on Tuesday with
stocks falling, the dollar recovering some losses and gold
dropping back a bit from record highs.
Investors were generally taking profits from Monday's stock
rally, which saw U.S. blue chips gain 1.3 percent and European
shares 2 percent.
There was also some concern about the banking sector.
A German newspaper reported that the majority owners of
WestLB [] were threatening not to support the stricken
German landesbank's requirement for more capital.
[]
Rating agency Standard & Poor's also said on Monday it
found most banks in a global study were weakly capitalised, with
Citigroup <C.N>, UBS <UBSN.VX> and Mizuho Financial Group
<8411.T> more than two-thirds below the average. []
MSCI's all-country word stock index <.MIWD00000PUS> was down
0.6 percent after gaining 1.7 percent on Monday. The volatile
Chinese market <> was down nearly 3.5 percent.
Market analysts said there was little surprise that some
profit taking was taking place. But they remained relatively
bullish about the future.
"China is down after a strong run," said Bernard McAlinden,
investment strategist at NCB Stockbrokers in Dublin. "But we're
still in a cyclical bull market."
The FTSEurofirst 300 <> index of top European shares
was down 0.7 percent. Earlier, Japan's Nikkei <.225> hit its
lowest close in four months, down 1 percent on the day.
Japan's current concerns are focused on worries financial
firms will tap the market for equity financing and on a stronger
yen hurting the shares of exporters.
Many global stock investors are being cautious heading into
the year-end, wanting to lock in profits after a very good run
in 2009 while also worrying about the true state of the world
economy.
Some concerns about the U.S. economy were at least
temporarily eased on Monday when data showed sales of previously
owned U.S. homes had risen to their highest level in more than
2-1/2 years.
DOLLAR FIRMS
The dollar was broadly higher after a bit of a battering on
Monday while the euro fell on the German media report about
WestLB.
The U.S. currency was up 0.4 percent against a basket of
competitors <.DXY>. It remains down 7 percent for the year,
reflecting low U.S. yields on offer.
The euro was down 0.4 percent at $1.4905 <EUR=> and the
dollar slipped about the same to 88.65 yen <JPY=>.
Gold slipped on the stronger dollar and was selling at
around $1,164 an ounce, about $9 off an all-time peak hit on
Monday.
Euro zone government bonds rose, with Bund futures reaching
their highest level since early October.
(Additional reporting by Brian Gorman; editing by Chris Pizzey)
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
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((jeremy.gaunt@thomsonreuters.com; +44 207 542 1028; Reuters
Messaging: jeremy.gaunt.reuters.com@reuters.net; editing by
Chris Pizzey))
