The global risky-asset rally was suffering a hangover on Tuesday following the exuberance of the previous session.

After hitting new highs for the year on Monday, European bourses opened lower, mimicking Asian stocks’ slide into the red, as commodity prices pulled back on a firmer dollar.

The FTSE 100 in London fell 0.3 per cent from its 13-month closing high to trade at 5358.5. The FTSE Eurofirst 300 was flat at 1034.1, with banks and real estate stocks struggling.

US equity indices had provided fresh impetus to early Asian trade after the S&P 500 index closed up 1.5 per cent at a new peak for 2009 on well-received retail sales numbers. However, profit-taking set in across much of the region as the dollar again showed signs of life.

The greenback had been volatile on Monday as traders reacted to comments from Fed chairman Ben Bernanke, at one stage hitting a fresh 15-month low of 74.67 on a trade-weighted basis before bouncing a touch. On Tuesday the dollar was up 0.2 per cent at 75.07 and up 0.3 versus the euro at $1.4928 having again breached $1.50 in the previous session.

The dollar’s mini-revival took the wind out of the commodity rally. Gold retreated from Monday’s all-time high of $1,143.25 to trade down 0.5 per cent at $1,132.95 an ounce. Oil was down 0.6 per cent at $78.46 having flirted with $80 a barrel the day before. Copper dropped 0.6 per cent at $3.08 per/lb.

The Nikkei 225 in Tokyo fell 0.6 per cent to 9,729.5, with the yen’s strength – Y89.01 to the dollar, up 0.1 per cent – again damping sentiment.

Mainland China’s benchmark, the Shanghai Composite, managed a rise of 0.2 per cent at 3,282.9, while Hong Kong’s Hang Seng lost 0.1 per cent per cent to 22,914.2. In Australia, the S&P/ASX 200 gave up 0.5 per cent to 4,729 on weaker financials.

US equity futures currently point to the S&P 500 falling 3 points at the opening bell. Wall Street’s measure of investor anxiety, the Vix index, is sitting at 22.89 having fallen 2 per cent on Monday.

The benchmark US 10-year Treasury yield rose 1.7 basis points to 3.364 per cent, while the yield on Japan’s 10-year JGB fell 2.5bp at 1.315 per cent.

The UK government bond yield curve flattened after the data for consumer price inflation was published. CPI rose between September and October by 0.2 per cent , a touch stronger than expected. Yearly CPI hit 1.5 per cent. The 10-year gilt yield fell 2 basis points to 3.730 per cent. The more intrerest rate sensitive 2-year gilt saw its yield rise 2bp to 1.339 per cent. Sterling hit a two-month high versus the euro, rising 0.4 per cent to 88.63p.