World Economy

Global Stocks Rise

Global Stocks Rise
Global Stocks Rise

World stocks and bond yields rose on Monday, lifted by a re-emergence of so-called “Trump trades” as investors bet that the US president’s tax reform plans will boost economic growth and corporate profits.

Following on from Friday’s record high closes on Wall Street, Asian stocks rallied to 1-1/2-year peaks and a broad measure of pan-European stocks hit its highest since late 2015, Reuters reported.

The Japanese yen was the biggest underperformer among major currencies, as is typical when riskier assets such as stocks are doing well.

Investors were also comforted by the two-day US-Japan summit held over the weekend apparently having ended smoothly without President Donald Trump talking tough on trade, currency or security issues.

“Trump-based reflation pricing remains the major driver in the US stock markets, and thirsty investors are waiting for more details on Trump’s corporate tax cut plans,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

The STOXX 600, Europe’s leading index of top 600 shares, rose 0.6% to 369.51 points, the highest in over a year. Mining and basic resources sectors were among the leaders.

Germany’s DAX was up 0.9%, led by a 15% rise in drugmaker Stada after the company said it had received two offers for the acquisition of the company, one of which is private equity group Cinven Partners LLP.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5%, while Japan’s Nikkei rose 0.4%.

US futures pointed to a higher open on Wall Street. The S&P 500, Dow Jones Industrials and Nasdaq Composite all posted record closing highs on Friday.

Figures on Monday showed that Japan’s economy grew for a fourth straight quarter in the final three months of last year as a weaker yen supported exports, but doubts over the sustainability of the recovery persisted.

The euro’s rise of 0.5% against the yen to 121.00 yen, helped steady the European currency against the dollar. The euro was last unchanged on the day at $1.064, inching further away from Friday’s three-week low of $1.061.

Ten-year US Treasury yields rose 3 basis points to 2.44%.

In commodities, copper hit its highest levels since May 2015 after shipments were shut off from the world’s two biggest copper mines—due to a strike in Chile and an export’s ban by Indonesia.

It last traded at $6,126 per ton, up 0.6% on the day. On Friday it jumped more than 4%, its biggest one-day rise in almost four years.

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