Stocks extend rally; London hits record
london — World stock markets rallied further on Thursday on a bright economic outlook and rising oil prices, with London clinching a new record peak.
“It’s onwards and upwards for global stock markets,” said Lee Wild, head of equity strategy at online stockbroker Interactive Investor. “The big three US indices all made record highs overnight, and many Asian bourses are now trading at their best in a decade.
“With economic data underpinning forecasts for strong global growth in 2018, traders are happy to keep buying risk assets.”
London’s benchmark FTSE 100 shares index of top companies scored a record-high intra-day peak in early deals, hitting 7,698.48 points. Frankfurt’s DAX 30 and the Paris CAC-40 also charged higher, with the energy sector jumping on higher crude oil prices.
“There are further gains for oil shares which continue to ride the coat-tails of a further increase in crude prices to levels not seen since mid-2015,” added Wild.
“There have been major outages over the past few months in the North Sea and Libya, and now markets are pricing in an outside chance that domestic tension in Iran could threaten supply.”
In Asia, Tokyo led another broad rally as soaring oil prices fuelled bumper gains for energy firms, following more records on Wall Street. Japan’s Nikkei index ploughed more than three percent higher on its first trading day for 2018 as investors played catch-up with two days of advances elsewhere.
Like in New York, petroleumlinked shares were the standout as oil prices sprang to three-year highs on the back of a big freeze in the United States, tensions between major producers and a weaker dollar.
The dollar meanwhile held on to most of the previous day’s gains after minutes from the Federal Reserve’s December meeting showed policymakers upbeat about the outlook for the world’s top economy, which could lead to several further interest rate hikes.
While analysts said the board was divided over the speed of rises, it was confident Trump’s tax cuts could boost consumer spending.
“The release overnight of the latest minutes from their December meeting has had little impact on financial markets,” noted MUFG analyst Lee Hardman.
“The minutes provided little further insight into the outlook for Fed policy beyond which was already communicated back in December,” he added.
Eyes are now on the release of US jobs data today. —