GLOBAL MARKETS-With big tech on holiday, world shares inch higher

(Refreshed top, adds comments)
* European stocks open sharply higher, FTSE helped by weak
pound
* Pound down 0.5% as no deal Brexit risks rise
* Japan's Nikkei falls, Chinese shares in red
* Currency market action muted
* Oil falls 1.2% after Saudi price cuts

By Thyagaraju Adinarayan
LONDON, Sept 7 (Reuters) - World shares inched higher led by
Europe on Monday, after last week's rout in U.S. technology
stocks that saw $2.3 trillion in value wiped off in two days
with investors taking note of lofty valuations when the global
economy is still in a recession.
Market activity was likely to remain subdued for the rest of
the day with the U.S. closed for the Labor Day holiday, though
Nasdaq futures NQc1 fell a further 1%.
"This market rally may likely pause given stretched
valuations," said Stephane Ekolo, an equity strategist at TFS
Derivatives in London. "If earnings do not improve materially,
investors might well need to buckle up and expect a correction."
European bourses, which have fewer technology stocks
compared with the United States, started the week in the black,
driven by a 1.6% gain in Germany's DAX .GDAXI and London's
FTSE 100 .FTSE .
UK bluechip stocks, many of which derive much of their
profits overseas, were also helped by a falling pound, with
Brexit talks plunging into crisis following Britain's threat to
override its EU divorce deal. Sterling GBP=D3 fell around half
a percent against the dollar and euro on Monday.
"It is almost inevitable that the perceived probability of
'no deal' will escalate over the coming weeks," Goldman Sachs
analysts wrote in a note.
The tech sell-off showed no signs of abating as Tesla
TSLA.O , the poster child of the euphoria in U.S. big
technology stocks, fell 4.5% in Frankfurt after it was excluded
from a group of companies that were being added to the S&P
500. U.S.-heavy MSCI world shares index .MIWD00000PUS was up
0.3%. The index had hit a record high last week, driven by
unprecedented central bank stimulus, but the rally fizzled out
last week amid worries over heady valuations and a patchy
economic recovery.
"Our risk indices have begun to turn from their euphoria
highs," Jefferies said, adding that it was switching its
weighting on the MSCI All-World index to "tactically bearish" in
the short term.
"On the balance of probabilities, last week's correction has
further room to go."
In Asia, China's blue-chip index .CSI300 slipped 2.3% as
the possible U.S. blacklisting of China's largest chip maker,
Semiconductor Manufacturing International Corp 0981.HK (SMIC),
hit tech firms across the board. MOOD
The mood across Asian markets was tentative. MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was
last down 0.2% after two straight days of losses toppled it from
a 2-1/2-year peak last week.
Data earlier on Monday showed Chinese imports fell 2.1% in
August from a year earlier, confounding expectations for a 0.1%
increase, in a sign of sluggish domestic demand. Exports jumped
by a larger-than-expected 9.5%.
Japan's Nikkei .N225 fell 0.5% with SoftBank 9984.T
coming under heavy selling pressure following media reports it
has spent at least $4 billion buying call options on listed U.S.
technology stocks. In currency markets, the dollar index .DXY gained 0.1% in
holiday-thinned trade on Monday, while traders shifted their
focus to the European Central Bank's meeting on Thursday. Most
analysts don't expect a change in policy stance.
The dollar was flat against the yen at 106.28 JPY= ahead
of a heavy week of macroeconomic data with figures on household
spending, current account and gross domestic product due on
Tuesday.
The message the ECB will deliver on its inflation forecasts
is likely to set the direction for the euro, which has surged in
the past few months.
European government bonds yields rose across the board on
Monday on signs of an improved global economy and ahead of a
week of healthy supply, as countries seek bond markets to help
fund the response to the COVID-19 crisis. In commodities, oil prices hit their lowest since July,
after Saudi Arabia made the deepest monthly price cuts for
supply to Asia in five months. U.S. crude CLc1 fell 1.3% to
$39.25 a barrel. Brent crude LCOc1 skidded to $42.11. O/R
Fading optimism about a recovery in demand amid the
coronavirus pandemic also hung heavy.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Tech rout wipes off $2.3 trillion from World stocks https://tmsnrt.rs/2R2KZyk
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>