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World Stocks Get the Jitters as U.S. Presidential Debate Looms

European and Asian shares retreated on Monday as investors waited to see how the candidates would fare in a U.S. presidential debate.
Men walk past an electronic board showing market indices outside a brokerage in Tokyo
Men walk past an electronic board showing market indices outside a brokerage in Tokyo, Japan, March 2, 2016. REUTERS/Thomas Peter
/ Source: Reuters

European and Asian shares retreated on Monday as investors waited to see how the presidential candidates would fare in a debate, while oil prices firmed before an informal OPEC meeting.

"The Wall Street fall [on Friday] seems to be at least as much to do with oil prices as it is with (the possible election of) Donald Trump," said Investec economist Philip Shaw.

Men walk past an electronic board showing market indices outside a brokerage in Tokyo
Men walk past an electronic board showing market indices outside a brokerage in Tokyo, Japan, March 2, 2016. REUTERS/Thomas Peter

Half of America's likely voters will rely on the presidential debates to help them make their choice between Republican Donald Trump and Democrat Hillary Clinton in the November 8 election, according to a Reuters/Ipsos poll released on Monday.

"A good performance from Mr. Trump could see market volatility increase, particularly if investors think there is a possibility that he could actually win," wrote Michael Hewson, chief market analyst at CMC Markets in London.

European stocks fell, dragged down by a pullback in the shares of major banking and energy companies, and tracking Wall Street's fall on Friday.

"The overwhelming driver for stock markets in recent weeks has been expectations of central bank policy," said Shaw.

"But as the U.S. elections are moving into a closer market horizon, the tendency of U.S. political events to influence global markets will probably rise," he said.

Oil prices rebounded after Algeria's energy minister said on Sunday that all options were possible for an output cut or freeze at this week's informal meeting of OPEC producers.

Wall Street logged weekly gains but ended with solid losses on Friday. Still, the S&P 500 managed to record its best weekly performance in more than two months after the U.S. Federal Reserve held interest rates steady on Wednesday.