Trump-Russia ties spook equity markets
The dollar hit a four-month high against the yen but global equity markets turned lower on Tuesday as investors awaited testimony by Federal Reserve Chair Janet Yellen this week and any signs of tighter US monetary policy.
MSCI's measure of stock performance world-wide stock initially rose, lifted by expectations of robust global growth.
US stocks reversed early gains to edge lower after President Donald Trump's eldest son released an e-mail chain related to a meeting with a Russian lawyer linked to the Kremlin during last year election campaign.
"People are worried that it just means more political uncertainty, and sort of a continuation of the stalemate in Washington, a continuation of the delay in trying to get the Trump agenda passed through Congress," said Robert Pavlik, chief market strategist at Boston Private Wealth.
Europe's main bourses earlier had faltered despite a fresh flurry of M&A activity.
The dollar initially edged higher against a basket of currencies on the back of the past fortnight's 25 basis-point rise in the yield of benchmark 10-year US Treasury bonds.
MSCI's all-country world stock index fell 0.11pc, while the pan-European FTSEurofirst 300 index of leading regional shares slid 0.71pc to a provisional close of 1,490.15. The Dow Jones Industrial Average fell 3.72 points, or 0.02pc, to 21,404.8. The S&P 500 lost 4.83 points, or 0.20pct, to 2,422.6 and the Nasdaq Composite added 1.99 points, or 0.03pc, to 6,178.38.
Euro zone bond yields resumed their march upwards as the focus shifted to the pace of monetary tightening and when the US central bank might start unwinding its massive balance sheet.