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Business & Economy

Worldwide stocks start year on a high

Asian stocks hit new heights on Wednesday, according to MSCI'S index of global markets. (Reuters)
LONDON: Worldwide stocks hit new highs on Wednesday as European markets continued a strong start to the year, suggesting 2018 will be another year of synchronized growth for global markets — led by a robust European economy.
MSCI’s index of global stocks, MIWD — which tracks shares across 47 countries, had jumped to its biggest one-day gain in more than two weeks on Tuesday, after having its best 12 months since 2009 in 2017.
The pan-European stock index sat 0.2 percent higher following considerable gains for their Asian and US counterparts overnight as manufacturing surveys pointed to a strong start for the European economy.
The single currency euro was holding steady near the four-month high of $1.2081 hit on Tuesday.
“Investors have woken up in the new year and looked forward to another firm year for global growth with very muted downside risk,” said Investec economist Philip Shaw. But he urged caution about getting too excited given we are only in the first two trading days of the new year.
“The converse is the sell-off in bond markets: the idea that inflation pressures may be firmer than expected and central banks could take a slightly more aggressive approach than previously thought,” Shaw added.
ECB rate-setter Ewald Nowotny told the German media that the European Central Bank (ECB) may end its stimulus program this year if the euro zone economy continues to grow strongly.
Earlier in the session, Asian stocks struck a range of new peaks: a record high for stocks in the Philippines, a 24-year top for Thailand and a decade-high for Hong Kong. MSCI’s index of Asia-Pacific shares outside Japan, MIAP, rose 0.4 percent, having jumped 1.4 percent on Tuesday in its best performance since last March.
This came after Wall Street started the new year as it ended the old, scoring another set of record closing peaks. The Dow .DJI rose 0.42 percent, while the S&P 500 .SPX gained 0.83 percent and the Nasdaq .IXIC 1.5 percent. The gains in riskier assets came as industry surveys from India to Germany to Canada showed quickening activity.
“The breadth of the recovery is extraordinary,” said Deutsche Bank macro strategist Alan Ruskin, noting that of 31 countries covered, only three failed to show growth while all the largest manufacturing sectors improved.
Oil prices surged again, inching toward two-and-a-half year highs hit on Tuesday as strong demand and ongoing efforts led by OPEC and Russia to curb production tightened the market. Brent crude futures LCOc1 was up 0.6 percent at $67 a barrel, while US crude futures CLc1 shot up 0.8 percent to $60.87 a barrel.

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