* Chart: overall asset performance http://tmsnrt.rs/2yaDPgn
* Chart: world exchange rates http://tmsnrt.rs/2egbfVh
* Reuters Live Markets Blog:
LONDON, Jan.27 (Reuters) – European stock indices opened lower on Wednesday, as investors focused on the US Federal Reserve meeting and earnings from US tech giants.
The MSCI World Stock Index, which tracks stocks from 49 countries, fell 0.1% at 8:42 a.m. GMT, after declining slightly last week after hitting a new all-time high on January 21. In Wednesday’s Asian session, stocks suffered from some profit taking as investors wary of stretched valuations.
European stock indices opened in the red. The STOXX 600 was down around 0.3% on the day at 08:54 GMT.
London’s FTSE 100 was down 0.2% while Germany’s DAX was down 0.5%.
The dollar appreciated against a basket of currencies as European markets opened, and was at 90.275 at 8:46 a.m. GMT, up 0.1% on the day.
The Fed is not expected to make any policy changes, but investors will be listening to changes in tone around the economic outlook and any mention of slowing – or “tapering” – asset purchases. from the Fed.
“The big question will be any timeline for asset purchases, but Powell will likely take an accommodating tone on this and reiterate that it is premature to consider this given the difficult short-term outlook and remaining uncertainties,” said Jim, strategist at Deutsche Bank. Reid wrote in a note to clients.
The 10-year US Treasury yield held close to the three-week low it hit in the previous session, and was broadly flat for the day at 1.0398% at 0846 GMT.
The quarterly results of US tech giants including Facebook and Apple, due later in the session, were also the focus.
“With some financial assets currently trading in what many describe as bubble territory, there will be increased attention on these releases to see if these current valuations are warranted,” said Jim Reid of Deutsche Bank.
Although S&P 500 e-minis were down around 0.1%, Nasdaq futures were up 0.4% at 8.47 a.m. GMT, helped by strong Microsoft results in the session former. Microsoft said its Azure cloud computing services increased by 50%.
The increased participation of retail investors in the stock market became a concern this week, as amateur traders in Reddit’s r / WallStreetBets stock discussion group crowded into GameStop, causing it to skyrocket as sellers of Professional shorts have made every effort to cover losing bets.
For some stock market professionals, the recent moves seem symbolic of a stock market that could be overvalued at the end of a year dominated by flooding of fiscal and monetary stimulus to ease the coronavirus crisis.
The International Monetary Fund raised its forecast for global economic growth in 2021 and said the slowdown triggered by the coronavirus last year would be almost a percentage point less severe than expected.
Global cases of COVID-19 topped 100 million on Wednesday, and countries around the world are grappling with new variants of the virus and delays in vaccine deployment.
The United States aims to have enough doses of the vaccine to immunize most Americans by the summer, President Joe Biden said on Tuesday.
In Europe, supplies of the COVID-19 vaccine have been delayed. Hospitalizations in France hit an eight-week high.
The euro fell 0.1% to $ 1.21455 at 0848 GMT, while eurozone government bond yields edged up.
Gold was down about 0.2%. Bitcoin was down around 3.3%.
Oil prices rose after industry data showed U.S. crude inventories unexpectedly dropped last week and China recorded its smallest daily increase in COVID-19 cases on top of two weeks.
(Reporting by Elizabeth Howcroft; Editing by Nick Macfie)
