Credit: REUTERS/CARLO ALLEGRIBy Rodrigo Campos
NEW YORK, April 22 (Reuters) - Global stocks fell on Thursday weighed by Wall Street after a report that the Biden administration will propose a sharp increase to capital gains tax, while the dollar index gained as the euro and pound gave back some of the month's gains.
Oil prices were little changed as concerns over Libyan output offset worries that rising coronavirus cases in India and Japan would cause energy demand to decline.
On Wall Street, indexes turned lower after a Bloomberg report that the Biden administration would propose to lift the capitals gains tax to near 40% for wealthy individuals, nearly double the current rate.
"If they’re going to tax people more and their net is going to fall, the value of that instrument is lower. Incentives matter," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
"A lot of money that's in the market at this point is non taxable, and I don't think people do that calculation. Whenever they see news (like this), they just sell, they want to take the gains this year."
The Dow Jones Industrial Average .DJIfell 394.34 points, or 1.16%, to 33,742.97, the S&P 500 .SPXlost 44.88 points, or 1.08%, to 4,128.54 and the Nasdaq Composite .IXICdropped 153.66 points, or 1.1%, to 13,796.56.
MSCI's gauge of stocks across the globe .MIWD00000PUSshed 0.35% and the pan-European STOXX 600 index .STOXXrose 0.68%. Emerging market stocks .MSCIEFrose 0.28%.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.28% higher, while Japan's Topix .TOPXrose 1.82%.
Treasury yields fell alongside stocks on the capital gains tax issue.
Benchmark 10-year notes US10YT=RR last rose 3/32 in price to yield 1.5539%, from 1.564% late on Wednesday, remaining in a tight range so far this week.
Oil prices were in and out of positive territory as traders weighed lower output in Libya with concern over demand from India, the third-largest global consumer.
"The market realized that a global comeback in oil demand cannot come without a comeback of the world’s largest economies," said Bjornar Tonhaugen, head of oil markets at Rystad Energy, noting "India is diving deeper and deeper into a major crisis with infections setting new records every day."
U.S. crude CLc1rose 0.02% to $61.36 per barrel and Brent LCOc1 was at $65.30, down 0.03% on the day.
In currency markets, the dollar =USD rose as the pound gave back some of its recent sharp gains while the euro was weighed by an ECB statement that was hopeful on the economic recovery but lacking in details about the stimulus removal.
U.S. Federal Reserve and Bank of Japan meetings follow next week.
The dollar index =USDrose 0.247%, with the euro EUR=down 0.22% to $1.2006.
The Japanese yen strengthened 0.02% versus the greenback at 108.05 per dollar, while Sterling GBP= was last trading at $1.3833, down 0.69% on the day.
The Russian ruble rose against the dollar after Moscow signaled an end to military drills near the Ukraine border, easing some of the geopolitical risk premium.
The ruble strengthened 1.77% versus the greenback at 75.57 per dollar.
Turkish markets suffered under the weight of expectations that U.S. President Joe Biden will formally recognize the massacre of Armenians by the Ottoman Empire during World War One as an act of genocide.
The lira lost 1.64% versus the U.S. dollar at 8.31.
Spot gold XAU=dropped 0.7% to $1,781.86 an ounce. Silver XAG=fell 1.83% to $26.09.
Global assetshttp://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging marketshttp://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Caphttp://tmsnrt.rs/2EmTD6j
(Additional reporting by Simon Jessop in London, Ross Kerber in Boston, Lucia Mutikani in Washington, and David Henry and Scott DiSavino in New York; Editing by Nick Zieminski)
((rodrigo.campos@reuters.com;; +1 (332) 219-1131;; Reuters Messaging: http://www.twitter.com/rodrigocampos))
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