Global stocks climb as copper rally offsets iPhone X worries
World stocks edged higher on Wednesday as a strong rally in copper buoyed expectations for a strong year for the global economy in 2018 and helped mitigate concerns over the technology sector triggered by reports of soft iPhone X demand.
Copper prices rocketed to multiyear highs, pushing the MSCI world equity index, which tracks shares in 47 countries, up 0.30%. The metal, used in construction and machinery, is seen as a proxy for global growth.
“The rally in copper supports expectations that 2018 is going to be a strong year for synchronized global growth,” AxiTrader chief strategist Greg McKenna said.
Copper rose 1.29% to $7,217.00 a ton, its highest in nearly four years, on expectations of robust demand from top consumer China in 2018.
Shares in Asia, Europe and the United States advanced, shaking off reports of lackluster demand for Apple Inc.’s iPhone X. Trading during the holiday week was thin, with many traders and investors away ahead of New Year’s Day.
MSCI’s broadest index of Asia-Pacific shares closed 0.25% higher. The pan-European FTSEurofirst 300 index added 0.09%. Emerging-market stocks rose 0.53%.
Apple sagged 0.38%, one day after shares posted their worst single-day percentage fall since August 10. The drop came after Taiwan’s Economic Daily cited unidentified sources as saying Apple would slash its sales forecast for its flagship phone in the current quarter.
In late-morning trading, the Dow Jones Industrial Average rose 35.67 points, or 0.14%, to 24,781.88, the S&P 500 gained 4.36 points, or 0.16%, to 2,684.86, and the Nasdaq Composite added 17.61 points, or 0.25%, to 6,953.86.
The dollar fell 0.28% against a basket of major currencies as commodity-linked currencies gained and as traders bet improved global growth would spur major central banks to begin reducing monetary stimulus in 2018.
US crude fell 0.52% to $59.66 per barrel, and Brent was last at $66.02, down 0.66% after moving to multiyear highs a day earlier on supply concerns.
Though stocks inched up, there was an undercurrent of nervousness in the market that pushed some investors into government bonds, pushing their yields lower.
Benchmark 10-year notes last rose 7/32 in price to yield 2.443%, from 2.467% late on Tuesday.
“Geopolitical risks have notched a little higher, supporting rates markets,” Mizuho head of rates Peter Chatwell said, referring to a renewal in tensions around North Korea.
“The North Korean statement that UN sanctions are an act of war is, as tends to be the case, an exaggeration,” he said. “But nevertheless, the market has no choice but to price it. Some safe-haven positioning is a natural reaction.”
(Reuters)