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World Stocks Set for 10th Straight Week of Gains

MSCI’s world gauge was setting new milestones of its own, with its 10th week of gain on the trot securing its longest winning streak since 1999
An electronic stock indicator of a securities firm in Tokyo on ThursdayAn electronic stock indicator of a securities firm in Tokyo on Thursday

World stocks were set for their longest weekly winning streak since 1999 on Friday, while the dollar buckled again as its weakest run since 2010 reverberated through almost every major asset class.

The MSCI world equity index, which tracks shares in 47 countries, was inching higher ahead of what was expected to be another day of gains for Wall Street’s already-record high S&P 500 and Dow markets, Reuters reported.

MSCI’s world gauge was setting new milestones of its own, with its 10th week of gain on the trot securing its longest winning streak since 1999.

European shares edged up too though they were in the red for the week as the pressure of more euro strength, which has ripped to its highest in three years this week and is yet to suffer a weekly fall in 2018 took its toll.

On Friday, Britain's FTSE 100 gained 0.4% to 7,646 while France's CAC 40 advanced 0.9% to 5,529. Germany's DAX added 0.1% to 13,308. Futures augured small gains on Wall Street, with Dow futures up 0.2% and S&P futures up 0.3%.

Currency markets yo-yoed again on Friday. Comments from US President Donald Trump that he “ultimately” wanted a strong dollar had given the greenback a lift, but it couldn’t hold the gains in European trading and slid steadily lower.

“While President Trump’s comments prompted a short covering rally in the US dollar, they won’t have alleviated investors separate concerns about recent belligerent US rhetoric on trade,” said Michael Hewson, chief markets analyst at CMC Markets in London.

The dollar index, which measures the greenback against a basket of six major currencies, last stood at 89.006.

The euro meanwhile, had risen as much as half a percent to trade just below its December 2014 high of above $1.25 it had hit on Thursday as the ECB showed only minor concern about the single currencies recent surge.

Asian Markets

Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4% for the day, led by gains in Chinese financial and property shares.

That left it with gains for 11 straight days, the longest sequence since 2015, and its seventh straight week of gains for the first time since 2010.

Asian markets finished mostly higher. Japan's Nikkei 225 slipped 0.2% to 23,631.88 and South Korea's Kospi rose 0.5% to 2,574.76. Hong Kong's Hang Seng index jumped 1.5% to 33,154.12 and the Shanghai Composite index added 0.3% to 3,558.13. Stocks in Southeast Asia were mixed.

Equity Markets

In a weekly note on capital flows, Bank of America Merrill Lynch analysts said that 98% of global equity markets are now trading above 50 and 200-day moving averages, though the pace of the melt-up meant a correction was now increasingly likely.

World equity markets have rallied over the past year, buoyed by a synchronized uptick in global economic growth in a boon to corporate profits and stock valuations. But some reckon other drives may be spurring the rally.

“Investors have been fearful of valuations, fearful of geopolitical risks, but it feels like in the last few months, investor fears have been dissipating and greed has come to the fore,” said Mark Dowding of BlueBay Asset Management.

“That’s why you see in equities a capitulation of part of the bears and something of an intensification of bull-market stocks. Having risen gradually for a number of years, the move looks like it’s turning more parabolic in nature as greed takes over.”

The Dow and S&P 500 ended at their highest closing levels ever on Thursday although Wall Street relinquished bigger intraday gains. Futures indicated a positive open on Friday.

Another big mover in currencies on Friday was Britain’s pound, which rose as much as 1% after stronger than expected GDP numbers for the fourth quarter. A fourth quarter GDP reading from the United States is also due late Friday.

Oil prices reversed earlier falls as the weak dollar was seen supporting fuel consumption.

US crude futures were 0.1% higher at $65.56 per barrel after reaching $66.66 on Thursday, their highest since December 2014.

Brent crude futures were down 0.2% at $70.28 per barrel.

Spot gold was half a percent higher at $1,351.96 per ounce after sliding 0.8% overnight. It set $1,366.06 earlier on Thursday, its highest since August 2016.

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