Global stocks eased from record highs, as investors are staring at the central banks for direction on monetary policy tightening. This is a stark reminder of supply chain snags in corporate earnings reports.

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On Wall Street, the S&P 500 lost 0.51 percent from all-time high that hit on Tuesday, the Nasdaq ended flat, propelled by strong earnings from Microsoft and Google parent Alphabet.

Earning reports released by companies are showing that the largest US manufacturers including General Motors, General Electric, 3M and Boeing face logistics hurdles and higher costs due to global supply bottlenecks that are likely to persist into next year, according to a Reuters report. GM fell 5.4 percent following their earnings release on Wednesday.

In the Asian markets, Japan's Nikkei leading the loss fell 1.1 percent, MSCI's gauge of world stocks, ACWI, fell 0.05 percent in early Thursday trade.

Mainland Chinese shares slipped 0.2 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.1 percent.

Japan's IT conglomerate Fujitsu shed 9.8 percent, while robot maker Fanuc fell 8.5 percent as their earning showed a bigger than expected impact from chip shortages.

Investors are keeping close eye on whether the world's central banks will look to reduce their generous pandemic stimulus measures more quickly, even as global supply disruption fuelling worries about inflation.

The cue came from the Bank of Canada, which ended its quantitative easing sooner than expected and signalled it could hike interest rates earlier than previously thought, as soon as April 2022.

Following the BoC's move, the investors are pondering over whether the US Federal Reserve, too, could move faster towards rate hikes.

The Fed is expected to announce tapering of its bond purchase at its policy meeting next week. The two-year US Treasuries yield rose to as high as 0.528 percent and last stood at 0.501 percent. At the start of October, it was nearly 0.26 percent.

However, the longer-dated yields fell in part as a tighter monetary policy is likely to tame inflation down the road. The 10-year US notes yields dropped to 1.545 percent, from a five-month peak of 1.705 percent touched a week ago.

UK Gilts yields plunged after Britain's government cut its borrowing forecasts more than expected, which is helping to drive global bond yields lower.

The 10-year Gilt yield fell 12.8 basis points on Wednesday to 0.982 percent, its biggest decline since March 2020.

Canadian dollar held firm at C$1.2362 per dollar in foreign exchange markets following the BoC's surprise.

Other major currencies were on hold ahead of policy announcements from the Bank of Japan and the European Central Bank later in the day. According to the Reuters report, no major changes are expected.

The yen stood at 113.73 per dollar, off its four-year low of 114.695 touched last week. Euro changed hands at $1.1600.

Oil prices fell after US crude oil stockpiles rose more than expected. Brent fell 1.8 percent to $83.07 per barrel, off Monday's seven-year high of $86.70, while US crude fetched $81.25 per barrel, down 1.7 percent and off Monday's peak of $85.41, a seven-year high.

-With agency inputs

(Edited by : Bivekananda Biswas)

First Published:Oct 28, 2021 9:13 AM IST