Reuters - Asia stock indexes faltered Monday as unease over a new coronavirus strain that was shutting much of the UK offset news a deal had been struck on U.S. virus economic aid legislation.
Sterling slid 1.1% to $1.3370 after several countries in Europe closed their borders to the UK as the country entered a tougher lockdown to fight a new strain of coronavirus.
Prime Minister Boris Johnson will chair an emergency response meeting Monday to discuss international travel and the flow of freight in and out of Britain.
That combined with the lack of a Brexit deal to cut 1% off FTSE futures, while Eurostoxx 50 futures shed 1.5%.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2% after hitting a string of record peaks last week. Japan's Nikkei reversed early gains to be down 0.6%, off its highest since April 1991.
In the U.S., Republican U.S. Senate majority leader Mitch McConnell said an agreement had been reached by congressional leaders on a $900 billion COVID-19 relief bill.
The news saw futures for the S&P 500 jump at first - only to fade to a loss of 0.1% as the session progressed.
Bank of America said $46.4 billion flowed into equities in the past week while the outflow from cash was the largest in four months. There were record flows into technology shares and large flows to the consumer sector, health care, financials, real estate and value stocks.
Bank of America chief investment strategist Michael Hartnett said a "sell signal" had been triggered for the first time since February as cash levels declined to 4.0% in the latest Global Fund Manager Survey.
"Positioning is getting overextended as policy support and profits are peaking," he said. "Expectations for higher growth, inflation and lower interest rates have become consensus and investors are positioning for a very rosy scenario of low volatility and high growth."
Another popular trade has been shorting the U.S. dollar and again positioning was looking overextended by many measures, giving the currency some respite Monday.
"FX markets await final outcomes of a possible Brexit deal and U.S. fiscal package," said Ned Rumpeltin, European head of FX strategy at TD Securities.
"We remain biased to fade any 'good news' kneejerk USD-selling on both fronts, however. These factors look fully priced and the short-USD trade appears increasingly crowded."
The dollar index edged up a little to 90.147 and away from last week's trough of 89.723, which had been the lowest since April 2018.
The euro likewise edged back to $1.2210, while the dollar was steady on the yen at 103.33.
The dollar also found support from a Nikkei report that Japan Prime Minister Yoshihide Suga told Finance Ministry officials in November to make sure the dollar did not fall below 100 yen.
The general risk-off mood saw gold prices gain 0.8% to $1,895 an ounce.
Oil prices ran into selling following seven consecutive weeks of gains, with travel restrictions in Europe a further blow to demand.
U.S. crude fell $1.45 to $47.65 a barrel, while Brent crude futures dropped $1.53 to $50.73.