US, European markets affected ahead of US elections
A new poll that favored Republican candidate Donald Trump injected fresh anxiety into US and European equity markets on Tuesday, on week before Americans choose their next president.
In Asia Hong Kong's Hang Seng Index led most major regional markets higher after China's closely watched purchasing managers index hit its highest level in more than two years, indicating that the important manufacturing sector -- and the world's number two economy - was levelling out.
But as the trading day moved to Europe, early gains for stocks petered out after an ABC News/Washington Post tracking poll found Trump edging ahead of Democratic rival Hillary Clinton by one point for the first time since May.
Trump's 46-45% lead in the White House race, while well within the margin of error, possibly reflected the renewed controversy over Clinton's use of a private email server while serving as US Secretary of State.
Frankfurt lost 1.3%, Paris fell 0.9% and London finished 0.5% lower.
In New York, the Dow Jones Industrial Average fell 0.6% while the broader S&P 500 declined 0.7% and the Nasdaq Composite Index dropped 0.7%.
Globally, investor confidence remains fragile after Friday's bombshell news that the FBI was investigating additional emails connected to Clinton, Wall Street's preferred candidate.
"The market is pricing in a somewhat reduced likelihood of a Clinton victory, but it's not down all the way to pricing in a Trump victory," said Karthik Sankaren, director global strategy of Eurasia Group.
Election jitters also overshadowed the Federal Reserve's meeting, which is expected to leave US interest rates untouched Wednesday but could signal an intention to raise them next month.
The VIX volatility index, which is seen as a measure of the US market's fears, briefly climbed above 20 for the first time since the Britain voted in June to pull out of the European Union. It finished at 18.35, still sharply higher than Monday.
Gold glitters on uncertainty
Gold prices continued to climb, jumping more than 1% to $1,293 an ounce.
"Gold appears to be being accumulated as a hedge against equity market declines before the US election," said CMC Markets analyst Jasper Lawler.
The better-than-expected economic data from China also buoyed the mining sector because the Asian powerhouse is a leading consumer of many metals.
"The commodity space remains supported by rising metals prices and positive China data," said Mike van Dulken, head of research at trading firm Accendo Markets.
Shares in Antofagasta climbed 1.8 percent, while Fresnillo jumped 4.8 percent.
British energy giant BP shed 4.5% after a key oil industry profitability measure, underlying replacement cost, tumbled 49% in the third quarter from a year earlier.
However, rival Royal Dutch Shell said its profit - excluding one-off items and stripping out the changing value of oil inventories - advanced 17%, beating forecasts and sending its 'B' share price 4.0% higher in London.