Global equity prices drifted lower on Thursday as worries about the US presidential election continued to weigh on investor sentiment, while sterling rose after a UK court ruled that the British government needed Parliament’s approval to trigger Brexit.

Longer-dated US Treasury prices slipped after the Bank of England indicated that inflation is likely to rise further, and oil prices remained weak on skepticism about OPEC’s planned production limit.

MSCI’s 47-country “All World” index fell 0.37 per cent, dragged down by weakness on Wall Street.

The S&P 500 fell for an eighth straight session, its longest losing streak since the 2008 financial crisis, as Facebook shares weighed and investors grappled with uncertainty over next week’s US election.

Facebook shares fell as much as 6 per cent, a day after the social media giant warned that revenue growth would slow this quarter.

“The polls have tightened and now the concern is more about what might a Trump presidency look like and the market hasn't quite priced that in,” said Ernie Cecilia, chief investment officer of Bryn Mawr Trust in Bryn Mawr, Pennsylvania.

“Given the fact that the election is five days away, that's what's driving near-term behavior right now.”

Investors have been unnerved in recent days by signs that the US presidential race between Democrat Hillary Clinton and Republican Donald Trump was tightening just days before Tuesday’s vote.

The CBOE Volatility Index, a gauge of near-term investor anxiety, rose 14 per cent to its highest level since late June.

The Dow Jones industrial average fell 28.97 points, or 0.16 per cent, to close at 17,930.67, the S&P 500 lost 9.28 points, or 0.44 per cent, to finish at 2,088.66 and the Nasdaq Composite dropped 47.16 points, or 0.92 per cent, to end at 5,058.41.

The pan-European STOXX 600 ended flat, giving up early gains as a strengthened pound weighed on the shares of internationally exposed companies, including Diageo.

Sterling surged to a four-week high after the UK court ruling soothed concerns about Brexit and the Bank of England scrapped plans to cut interest rates. It climbed as much as 1.5 per cent to hit $1.2494, its strongest since October 7.

Meanwhile, the US dollar hovered near multi-week lows against a basket of major currencies, ending a morning reprieve in which the greenback stabilised, on uncertainty surrounding the outcome of the US presidential election. The dollar index was down 0.25 per cent to 97.156.

“We're now seeing markets price in a higher risk of a Trump presidency,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “Most polls are still showing that it's far too close to call, and that's ultimately what is keeping investors nervous.”

In bond markets, longer-dated US Treasury prices fell after the Bank of England indicated that inflation is likely to rise further, while uncertainty over the US election propped up shorter-dated debt.

The BoE ramped up its forecasts for growth and predicted that inflation would jump to 2.7 per cent this time next year, nearly triple its current level.

Benchmark 10-year notes ended down 5/32 in price to yield 1.82 per cent, up from 1.80 per cent late on Wednesday.

Oil prices extended their recent slide as investors reacted to a record weekly surge in US crude inventories and remained skeptical about whether the Organization of the Petroleum Exporting Countries can actually implement its planned output cap.

Brent crude settled down 51 cents, or 1.09 per cent, at $46.35 a barrel, and U.S. crude settled down 68 cents, or 1.50 per cent, at $44.66.

Gold edged higher in response to the lower dollar and uncertainty about the outcome of the US presidential race.

Spot gold prices were up 0.49 per cent at $1,303.26.

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