Bull run drives markets to record high
GLOBAL stock markets hit an all-time high yesterday, as a bull market that has seen equities quickly shake off their virus-driven losses showed no signs of slowing.
The MSCI All-Country World Index – the broadest gauge of stock markets across developed countries and emerging markets – touched 581.11 near the end of the European session, taking it above February’s peak.
Global stocks have risen more than 50pc from their March lows, reflecting a charge into equities that has been driven by soaring tech valuations, and a paucity of alternative risk options for investors.
Despite the bleak outlook, a string of better-than-expected bursts of economic news have added fuel to the fire in recent weeks.
The rally has been far from secular: even as companies such as Apple have chalked up new record highs, sectors such as real estate and transport remain in the doldrums.
Wall Street strategists have been forced to ramp up their expectations for how far markets will rise, as investors defiantly pile into stocks to drive an unprecedented rally. In recent days, signs of progress on vaccines and trade have raised sentiment, with officials from the US and China confirming talks earlier this week.
“As long as tariffs don’t rise, we see little reason to expect a significantly negative economic impact in the near term,” wrote Mark Haefele, chief investment officer at UBS global wealth management.
The FTSE 100 was the black sheep amid a generally positive session for European equities yesterday, closing flat after spending most of the day in the red.
The blue-chip index slipped slightly despite thin summer news flows, with several heavyweights such as Diageo, HSBC and AstraZeneca weighing.
Ahead of a reshuffle of London’s main market next month, FTSE Russell said ITV was likely to lose its spot in the FTSE 100 after nine years, with B&M European Retail in pole position for promotion.
HSBC fell 3.2p to 331.6p after secretary of state Mike Pompeo said the US was “dismayed” by reports that Hong Kong-based executives of pro-democracy outlet Next Media had been unable to access their accounts with the bank.
Shares in Aveva continued to climb, jumping 450p to £50.96 as analysts praised the group’s $5bn (£3.8bn) takeover of US business OSIsoft, announced on Tuesday.
Gold miner Polymetal rose 28p to £19.80. The group doubled its interim dividend after reporting a boost in revenues for the first half of the year.
On the FTSE 250, doorstep lender Provident Financial rose 38.3p to 234p after reporting results that beat expectations – despite its swing to a £28m loss.