World stocks dipped on Wednesday from recent record highs and the dollar edged towards three-month peaks as investors awaited minutes from the Federal Reserve's latest meeting to see if they confirm a hawkish turn in US monetary policy.

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Markets are nervous about riskier assets before the release of the June policy minutes, which will likely show how serious members are about tapering their asset buying and how early rate hikes could begin.

"If the minutes are really pushing towards tapering, we are going to see gold rise, the dollar rise and equities fall," said Giles Coghlan, chief currency analyst at HYCM.

The MSCI world stocks index dipped 0.11 percent to 723.35, after hitting a record high of 726.11 early on Tuesday.

S&P 500 futures gained 0.16 percent after the index dropped 0.20 percent overnight. NASDAQ futures rose 0.28 percent after the tech index hit another closing record high.

Wall Street had been unsettled by a survey on Tuesday showing a slight cooling in the red-hot US services sector, though at 60.1 the ISM index was still historically high.

European stocks gained 0.58 percent after a weak session on Tuesday. German stocks rose 0.83 percent and Britain's FTSE 100 was up 0.5 percent.

Expectations of a hawkish Fed tone helped the dollar rally against a basket of currencies to 92.546, up from a low of 92.003 on Tuesday and moving closer towards recent three-month highs.

The euro edged down to USD 1.1817, near its lowest in three months, after data on Tuesday showed investor sentiment in Germany fell by much more than expected in July.

German industry output fell 0.3 percent month on month in May, below analysts' expectations.

"Slowing economic momentum in Germany and the euro zone would point towards the ECB considering a tapering of its asset purchasing programme as part of PEPP (Pandemic Emergency Purchase Programme) at an even later stage than expected, in particular against the background of the spreading Delta variant," Commerzbank analysts said in a note.

The dollar was steady against the safe-haven yen, holding at 110.62.

The skittish mood helped Treasuries extend their recent rally with yields on US 10-year notes dropping almost 8 basis points overnight to their lowest since February. Yields recovered slightly to 1.3363 percent.

Germany's 30-year bond yield hit its lowest since early April at 0.218 percent.

A Chinese crackdown on tech companies was also dampening sentiment.

Hong Kong stocks hit near six-month lows and were down 0.4 percent, while US-listed ride-hailing company Didi Global Inc shed more than 20 percent in New York. Alibaba Group

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.22 percent after hitting six-week lows, while Japan's Nikkei fell 1 percent.

Bucking the trend, Australian stocks rose 0.9 percent and Chinese blue chips added 1.1 percent.

Oil prices rose, recovering from a steep drop in the previous session, after the cancellation of talks among OPEC+ producers that raised the prospect the world's major crude exporters will turn on the taps to gain market share.

Brent crude was up 64 cents at USD 75.16 a barrel, while US crude added 74 cents to USD 74.10.

Safe-haven gold was up 0.51 percent at USD 1,805.86 an ounce.

First Published:Jul 7, 2021 8:19 AM IST