Risk appetite spurs world stocks rally
london — World stock markets hovered close to all-time highs on Monday 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 opened higher, hitting their highest levels since August 2015, while Asian markets inched towards all-time peaks.
Wall Street last week posted its best start to a year in more than 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 per cent in the first five trading sessions of the year, its best start since 2010.
The US dollar recovered after a weak start to the year, strengthening past the key level of $1.20 against the euro, although with bearish positions against the greenback high, many traders are betting on a stronger single currency.
Positive eurozone economic data has helped the euro, and investors globally wanting exposure to the economic recovery in the region have piled into European assets. The synchronised global recovery has prompted central banks across the world to follow the Federal Reserve’s lead and start moving towards tighter monetary policy in recent months, supporting their currencies against the dollar. — Reuters