World stocks enjoy best start to year since 2010

World stock markets hovered close to all-time highs yesterday as the best start to a year in eight years showed little sign of running out of steam, with the combination of strong global growth and low inflation powering the appetite for risk.

European stocks jumped by as much as 0.4%, hitting their highest levels since August 2015, before easing slightly.

A surprise dip in German industrial orders, which fell in November for the first time since July, appeared unlikely to dent growing confidence in the economy after a strong run of positive economic news.

In Asia benchmarks inched towards all-time peaks. Wall Street last week posted its best start to a year in over a decade; Friday’s US jobs report, while weaker than expected, encouraged hopes that brisk growth and low inflation can be sustained this year.

The world index was flat, just below record highs. It has gained 2.5% in the first five trading sessions of the year, its best start since 2010.

The US dollar partly recovered after a weak start to the year, strengthening past $1.20 against the euro, although with bearish positions against the greenback high, many traders are betting on a stronger single currency.

Positive euro zone economic data – growth in the euro zone is on its best run in a decade – has helped the euro, and investors have piled into European assets.

The synchronised global recovery has prompted central banks to follow the US Federal Reserve’s lead and start moving towards tighter monetary policy in recent months, supporting their currencies against the dollar. – Reuters