World stocks set best quarterly run since 1990s

LONDON (Reuters) – World stocks have gained for sixth straight quarters to chalk up their best run since 1997, while a 20% rebound in oil has turned around one of its worst starts to a year on record.

It may just be the looming end of the great global easing experiment, but investors have spent another quarter piling into risk assets.

Emerging-market stocks have added almost 7%. Wall Street and MSCI’s 46-country world share index have both risen 4%, with the latter on its longest run of gains since late 1997, when 11 rising quarters came to an end.

Debt from some of the world’s most politically strained countries has also rallied.

Analysts ascribe this to a mix of higher global growth, cheap and plentiful central-bank liquidity, subdued inflation and until the last few weeks, a weak dollar.

“The market moved already considerably in the first half of the year, so it has been a consolidation of the gains,” said ABN Amro chief investment officer Didier Duret. “The last three months were a kind of intermediary zone, between the hopes [for stimulus] generated by the US administration and the confirmation that we have a strong recovery globally.”

A standout change since the end of the first half has been in the price of oil.

Crude was down 16.5% at the end of June, but its 20% rebound has hoisted it back into positive territory for the year. It has had its best quarter since the second quarter of 2016, marking its fifth quarterly gain of 20% or more in the last decade.

Metals have also shone. Industrial bellwether copper has added almost 8%, and zinc and nickel have jumped 14% and 11%, respectively.

Those commodity gains have been helped by the weak dollar, which is still down for the year against most world currencies.