Markets drift as traders close out month

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Associated Press

Posted on May 30, 2014 at 11:06 AM

Updated Friday, May 30 at 11:07 AM

LONDON (AP) — Financial markets drifted Friday on the last trading day of the month, when many investors traditionally close out positions.

Sentiment, particularly across stock markets, has been fairly buoyant over the past month primarily because the main U.S. stock indexes have hit a series of all-time highs. Those traders who may have been tempted by the age-old adage to "sell in May and stay away" may be regretting the move.

"'Sell in May' appears to have been cancelled due to lack of interest, so now we see if June will provide any succor for the bears," said Chris Beauchamp, market analyst at IG.

Next week, investors will have a lot to contend with, notably the European Central Bank's monthly policy meeting where a further stimulus to the 18-country eurozone economy is expected, and the monthly U.S. nonfarm payrolls report, which often sets the market tone for a couple of weeks after its release.

In Europe, the FTSE 100 index of leading British shares closed 0.4 percent lower at 6,844.51 while the CAC-40 in France fell 0.2 percent to 4,519.57. Germany's DAX was steady at 9,943.27.

In the U.S., the Dow Jones industrial average was down 0.3 percent at 16,658 while the broader S&P 500 index, which closed Thursday at another record high, fell 0.1 percent to 1,919. On Thursday, U.S. investors brushed aside a government report showing that the U.S. economy contracted by an annualized rate of 1 percent in the first three months. Blaming a cold snap across much of the U.S., they focused on further upbeat weekly unemployment figures.

Elsewhere, the yen briefly advanced against the dollar after figures showed Japan's consumer price index rose 3.2 percent in April, the highest inflation rate since 1991. Higher inflation was driven by a sales tax increase that is expected to dampen growth this quarter. At one stage the dollar had fallen to 101.48 yen. It's recovered through the day to 101.73 yen.

Following the yen's ascent earlier, Japan's Nikkei 225 declined 0.3 percent to 14,632.38 as some investors fretted over the impact of the export-sapping strength of the yen.

Elsewhere in Asia, South Korea's Kospi slipped 0.9 percent to 1,994.96 as the South Korean won strengthened to the highest level against the dollar in more than five years. But Hong Kong's Hang Seng added 0.3 percent to 23,081.65.

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