LONDON, June 26 (Reuters) – Global shares fell, while gold rose after an aborted uprising by Russian mercenaries raised questions about the authority of President Vladimir Putin, leaving investors little option but to focus on the broader macroeconomic picture.

The MSCI All-World index (.MIWD00000PUS) was last down 0.l%, led by declines in Europe, where defence stocks weighed on the STOXX 600 (.STOXX), which fell 0.3%.

Gold , often perceived as a safe-haven in times of geopolitical or market turmoil, rose 0.6% to $1,932 an ounce.

Brent crude futures eased 0.3% to $73.69 a barrel, having earlier fetched as much as $74.80. The rouble dropped to a 15-month low early in Moscow.

Russian mercenaries made a short-lived rebellion on Saturday, seizing the southern city of Rostov and advancing on Moscow demanding the removal of Russian military commanders in charge of the war in Ukraine.

The private Wagner army then withdrew after striking a deal guaranteeing their safety and the passage of their leader, Yevgeny Prigozhin, to Belarus.

The consequences for the Ukraine war were not clear, though the challenge to Russian President Vladimir Putin’s authority was the starkest in decades of his leadership.

With little in the way of concrete cues for markets, investors stuck to their recent playbook of favouring fixed income and other safe-havens over equities, particularly in light of Friday’s slew of weak business activity surveys.

“The market is still in this kind of transition phase, but I think the stress that we’ve seen in equity markets started before the news we got on Friday and before the events over the weekend,” said Frederik Ducrozet, head of macroeconomics research at Pictet Wealth Management.

“My guess would be that, when in doubt, you just follow the trend over the last few days and you will soon be facing this hawkish vibe from Europe and the central banks,” he said.

Gold , which had hit a three-month low on Friday, rose 0.2% to $1,925 an ounce. U.S. Treasuries were firm with yields, which fall when prices rise, marginally lower.

Two-year yields fell 4 basis points to 4.71%. Ten-year yields fell 5 bps to 3.69%.

“This putsch … has revealed cracks and fragilities that now cannot be unseen,” said Mizuho economist Vishnu Varathan.

“It undeniably amplifies global geopolitical risks.”

JITTERY MARKETS

Defence stocks such as BAE systems (BAES.L) and France’s Dassault Aviation (AM.PA) were among the biggest negative weights on the European stock market, while in the U.S. premarket, Lockheed Martin (LMT.N) and Northrop Grumman (NOC.N) shares were down 0.7-0.9%.

Adding to the sense of unease across markets were the latest travel figures for last week’s holiday in China that were not as strong as expected, once again highlighting how the post-COVID recovery in the world’s second-largest economy is fading.

S&P Global also followed most Wall Street banks and cut its 2023 GDP growth forecast for China on Sunday.

Last week, another round of central banks, including the Bank of England and the central banks of Norway and Switzerland, added to the chorus of voices calling for higher interest rates to wrestle inflation lower.

The S&P 500 (.SPX) staged its biggest one-week drop in three months last week and e-mini futures pointed to another decline at the open later, down 0.2%.

In currencies, the euro was flat against the dollar at $1.0893, but down 0.25% against the pound at 85.49 pence and down 0.5% against the yen after a survey showed another deterioration in business sentiment in Germany this month.

The Ifo institute said its business climate index and Klaus Wohlrabe, the head of Ifo surveys, told Reuters in an interview on Monday the German economy faces the likelihood of a more protracted recession.

European markets showed little reaction to Greece’s conservative New Democracy party storming to victory in a parliamentary election on Sunday. Greek 10-year bond yields fell 5 bps to 3.55%, while stocks in Athens (.ATG) eased 0.6%.

The yen , which has fallen nearly 9% this year as global interest rate expectations rise and Japan’s central bank stays dovish, bounced as much as 0.5% to below 143 per dollar, partly thanks to speculation around intervention or a policy shift.

(This story has been corrected to change the name of institution to Pictet Wealth Management, from Pictet Asset Management, in paragraph 9)

Additional reporting by Tom Westbrook in Singapore; Editing by Stephen Coates, Muralikumar Anantharaman, William Maclean

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