Global markets extend 2018 rally
European markets higher at the close
NEW YORK: The 2018 global equity rally continued apace Friday, with Asian and European markets posting healthy gains and Wall Street powering to fresh records once again. One day after the Dow finished above 25,000 for the first time, the blue-chip index moved higher still, picking up momentum throughout the day before finishing at 25,295.87, up nearly one percent.
The rise came despite a disappointing US jobs report. The US added just 148,000 jobs in December, the Labor Department reported, far below expectations, although unemployment held steady at its 17-year low of 4.1 percent. But investors, who opened 2018 in a fever pitch to buy equities, were unfazed by the lackluster data, much as they have also overlooked any concerns about US-North Korea tensions or domestic political controversies.
“Whatever the news, the reaction thus far continues to be more of what we have been seeing,” said Adam Sarhan, founder of 50 Park Investments. “Investors are buying, dismissing all negative news, whether economic or geopolitical and they are just buying stocks.” All main European markets were higher at the close, with standout Frankfurt clocking up a gain of just under 1.2 percent despite a share price plunge for heavyweight Deutsche Bank after a profit-warning.
‘Economic strength’
Paris followed not far behind with a 1.1 percent rise. London hit a new intra-day record peak at 7,727.73 points, and also set a new closing high, buoyed by the weak pound, which lifts the share prices of multi-national companies. In Asia on Friday, Tokyo stocks ended up 0.9 percent at a 26year high following its more than three percent jump Thursday, while Sydney added 0.7 percent. Seoul rose 1.3 percent, with dealers buoyed by news that North Korea had accepted the South’s offer of talks next week, further easing geopolitical tensions in the region. Hong Kong gained 0.3 percent to chalk up a ninthstraight gain.
Equity optimism has been fueled by US tax cuts, healthy corporate profits and strong manufacturing figures worldwide. Greg McKenna, chief market strategist at AxiTrader, said in a note that data from the manufacturing and services sectors “suggests economic strength across the globe remains robust.” He noted that an index of world factory activity was at its highest level in seven years. While oil prices inched down, they remain elevated after recent rises to around three-year highs thanks to Middle East tensions. Crude futures have also been boosted this week on keen US demand as the nation’s stockpiles fall on the back of a severe cold snap. — Reuters