Global stocks surge to 18-month high


Published — Wednesday 12 December 2012

Last update 12 December 2012 12:18 am

| نسخة PDF Print News | A A

NEW YORK: US stocks advanced and European shares rallied to an 18-month high yesterday after
German investor sentiment rose sharply in December and on expectations the Federal Reserve will keep pumping money into the US economy.
The euro gained versus the dollar, as investors steered clear of the US currency ahead of the Fed's meeting yesterday and today, while US government bond prices fell.
Morale among German analysts and investors improved sharply in December, jumping to 6.9 against expectations of -12.0, fanning hopes that Europe's largest economy will avoid recession this winter.
"We've been getting a lot of the beginning of our day from seeing what Europe has been doing and I think that's going to hold true today," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
The lack of progress in negotiations about the US "fiscal cliff" has kept investors from making aggressive bets in recent weeks, though most expect a deal will eventually be reached.
While the pace of talks in Washington to avert impending US tax hikes and spending cuts quickened, senior politicians on both sides cautioned that an agreement on all the outstanding issues remained uncertain.
The Dow Jones industrial average gained 61.56 points, or 0.47 percent, to 13,231.44. The Standard & Poor's 500 Index rose 7.13 points, or 0.50 percent, to 1,425.68. The Nasdaq Composite Index added 23.71 points, or 0.79 percent, to 3,010.67.
The FTSEurofirst 300 index rose 0.3 percent to 1,138.14 points, having hit its strongest since June 2011. The MSCI global stock index edged up 0.5 percent to 336.51 points.
The US central bank is expected to announce a new round of Treasury securities purchases at the end of its meeting today, according to a Reuters poll. The program would replace its "Operation Twist" stimulus, which expires at the end of the year.
Many economists believe the Fed will announce monthly bond purchases of $ 45 billion, although some think it could be more.
"We anticipate the Fed will announce Treasury purchases and as that depresses yields it will have a negative impact on the dollar and that supports the euro," said Jane Foley, senior currency strategist at Rabobank.
The euro rose 0.4 percent to $ 1.2989, while the dollar was little changed at 82.34 yen.
Markets had been rattled on Monday by Italian Prime Minister Mario Monti's announcement he would step down some weeks early.
But the upbeat ZEW data helped lift shares and the euro from their gloom.
Expectations of more easing drove the dollar index down 0.3 percent, and pushed the Canadian dollar to a two-month high, while the New Zealand dollar hit a nine-month high of $0.8369.
Benchmark 10-year Treasury notes were trading 9/32 lower in price to yield 1.65 percent, the highest in over a week and up from 1.63 percent late Monday. Investors were also
pushing for price concessions heading into $ 66 billion of US government debt auctions this week.
In the oil market, Brent crude rose 52 cents to $ 107.85 a barrel after OPEC said its production declined in November, while a weaker dollar and Middle East unrest also supported prices.
US crude gained 19 cents to $ 85.75.
Gold was steady near $ 1,710 an ounce, with more US stimulus expected to support gold's appeal as a hedge against inflation.

What's happening around Saudi Arabia

JEDDAH: A number of prominent Saudi women have cited several reasons for not running as candidates in the upcoming municipal elections. Some of them are an alleged lack of clarity on nominations and voting; they are too busy; and they want to make wa...
JEDDAH: At the weekly Cabinet meeting on Tuesday, Vice Custodian of the Two Holy Mosques Prince Mohammed bin Naif briefed the Cabinet on the talks held by Custodian of the Two Holy Mosques King Salman with President Abed Rabbo Mansour Hadi of Yemen,...
JEDDAH: Private schools have been devising new ways to raise money from parents to circumvent the Education Ministry’s cap on fee increases, a local publication reported here recently.Schools now charge for services that do not require the ministry’s...
JEDDAH: Vice Custodian of the Two Holy Mosques, Minister of Interior and Chairman of the Supreme Haj Committee Prince Mohammed bin Naif has approved the general plan for implementation of Civil Defense works in emergency cases during the current Haj...
RIYADH: The government has shut down a cosmetics factory in Riyadh for using undisclosed raw materials and unhygienic process at its production facility.A team from the Ministry of Commerce and Industry, during a routine inspection, found the plant u...
RIYADH: Recruitment offices here have decided to stop hiring Bangladeshi workers because they claim that a supply crunch has raised costs.Ibrahim Al-Megheimish, a recruitment expert, said that there are too few Bangladeshi workers seeking employment,...

Stay Connected