Global markets breeze higher on strong growth outlook
UNSUCCESSFUL BREXIT SUMMIT WEIGHS ON POUND AS EMERGING MARKET CURRENCIES GAIN
Global stock markets rose yesterday as optimism on the US economic outlook outweighed lingering trade war worries, dealers said.
European equities were all solidly higher, with London outshining its peers thanks to a slipping pound as Brexit talks appeared to be stalling.
Wall Street was higher out of the gate, building on the previous day’s all-time pinnacles, with investors concluding that trade war concerns were overblown as the world’s biggest economy powers ahead.
The benchmark S&P 500 and the Dow Jones Industrial Average hit record highs at the open, while the Nasdaq rose on gains in technology stocks. The Dow Jones Industrial Average rose 69.27 points, or 0.26 per cent, at the open to 26,726.25.
The S&P 500 opened higher by 6.01 points, or 0.21 per cent, at 2,936.76. The Nasdaq Composite gained 13.46 points, or 0.17 per cent, to 8,041.69 at the opening bell.
“Investors continue to brush off the ongoing trade dispute between the US and China,” said Craig Erlam, an analyst at Oanda. “Trade concerns remain contained, while the domestic economic front continues to paint a solid picture,” they said.
An unsuccessful Brexit summit in Salzburg, ending in “humiliation” for the British prime minister according to some, weighed on the pound from the start of business, but that in turn helped London’s benchmark FTSE 100 index.
The pound dropped the most since November after U.K. Prime Minister Theresa May warned that Brexit negotiations were at an impasse. The pound dropped as much as 1.4 per cent to $1.3080 as of 2:15pm in London, paring its gain last week to 0.2 per cent.
Asian equities enjoyed another day of strong buying to finish the week with a flourish.
Shanghai surged 2.5 per cent after the Chinese government ■ unveiled a stimulus packaged aimed at lifting domestic consumption.
“For the moment Asian stocks have shrugged off trade war concerns with the focus shifting to China’s new stimulus package which is expected to boost consumption and cut import tariffs from other countries,” said City Index senior analyst Fiona Cincotta.
EM currencies bounce
The upbeat mood on trading floors was being felt across the board, with embattled emerging market currencies seeing a recovery. South Korea’s won rose 0.4 per cent, while the Indonesian rupiah added 0.3 per cent and the Indian rupee was up 0.7 per cent. South Africa’s rand and the Turkish lira jumped more than one per cent.
China’s yuan extended gains after Premier Li Keqiang said last week that Beijing would not devalue the unit to offset the impact of Donald Trump’s import tariffs.