Stocks near record highs, Sweden ends negative rates

European equities were little changed in early trading. Britain's pound recovered from the 3 per centloss it suffered as fear of a no-deal Brexit returned.

The pan-region STOXX 600bobbed in and out of the red. Britain's blue-chip indexmanaged a 0.15 per centrise before a Bank of England meeting.

Wall Street futures suggested the S&P 500 would barely budge, after rising to a fifth consecutive record high on Wednesday. Earlier, Asian shares had pulled back from a one-and-a-half year peak as trading wound down before the end of the year.

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Japan's Nikkei fell 0.3 per centand China's stocks slippedfor the second session despite trade optimism. Australian shares ended 0.3 per centlower, led lower by mining stocks.

Investors were also watching proceedings in Washington, where the Democratic-led USHouse of Representatives voted to impeach USPresident Donald Trump for abuse of power and obstruction of Congress.

Market reaction was limited since the Republican-controlled Senate is widely expected not to convict Trump and removed him from office.

In Sweden, the central bank raised its key rate to zero after five years in negative territory. Economists wondered whether Sweden's hot-running economy would react badly and whether other sub-zero rate central banks in the eurozone, Japan, Denmark, Switzerland and Hungary would follow suit.

The crown rose 0.2 per cent, again that had been widely flagged.

"At the end of the day, this market doesn't look at macro and earnings, it just looks at monetary developments," said Stéphane Barbier de la Serre, macro strategist at Makor Capital Markets. "If the market thinks central banks (globally) are done with being dovish then we would see some volatility."

The British pound gained after suffering heavy losses on concern Britain could still crash out of the European Union without a trade deal in place when a transition period ends in December 2020.

Traders were also waiting for the Bank of England's last policy meeting of the year. No change in policy is expected, but more policy-makers might signal they could vote for an interest rate cut next year.

Sterlingrose 0.2 per centto $1.3105 after falling more than 3 per cent. It had reached an 18-month high on December13 after UK Prime Minister Boris Johnson's Conservative Party won a majority in a general election.

Against the euro, it stood at 84.94 pence, close to its weakest since December4. British inflation remained at a three-year low in November, data had shown on Wednesday.

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Germany's benchmark 10-year bond yield crept towards the six-month highs it touched last week, with bond traders focussed on the day's central bank meetings.

After Sweden's move, Norway kept its rates at 1.5 per centand reiterated it was likely to stay there for some time.

The Australian dollar jumped by 0.36 per centto $0.6879 after better-than-expected labour-market data made interest rate cuts less likely.

The yen barely moved from 109.58 per dollar after the Bank of Japan kept its quantitative easing in place and issued a gloomier assessment on factory output.

In commodities, Brent crudedipped 0.1 per centto $66.10 per barrel. UScrude also dipped 0.01 per centto $60.86 a barrel after USgovernment data showed a decline in crude inventories.

Prices are likely to be supported by production cuts coming from the Organization of the Petroleum Exporting Countries and its allies, including Russia.