GLOBAL MARKETS-RPT-Stocks hit record as rally enters new year, dollar rebounds

  • Reuters
  • Stock Market News
GLOBAL MARKETS-RPT-Stocks hit record as rally enters new year, dollar rebounds
Credit: © Reuters.

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* MSCI's all-country world index at all-time high

* Global equity markets boosted by China stimulus

* China manufacturing data adds to optimism

* Dollar recovers from six-month low

By Herbert Lash

NEW YORK, Jan 2 (Reuters) - Global stock markets jumped on the first day of trading in 2020 as a shot of Chinese stimulus and economic data drove a gauge of world equity performance to the latest in a series of record highs, while the dollar snapped a four-day losing streak.

Wall Street's three major indexes closed at records highs on Thursday, with the benchmark S&P 500 .SPX setting its 11th high in 14 sessions.

Gold hit a three-month peak while yields on U.S. Treasuries and Germany's 10-year bond tumbled on optimism about the world economy after positive Chinese manufacturing data and the move to increase liquidity dulled fixed income's safe-haven status.

News that China's central bank was freeing another 800 billion yuan ($115 billion) to prop up a slowing economy added to an improving outlook for economic growth, which has been fueled by easing U.S.-Sino trade tensions. factory activity expanded at a slower clip in December, pulling back from a three-year high the previous month as new orders softened. But production continued to grow at a solid pace and business confidence shot up. Caixin/Markit Manufacturing Purchasing Managers' Index for December eased to 51.5 from 51.8 in November, yet remained above the 50-mark that separates expansion from contraction for the fifth straight month.

In another piece of positive data, the number of Americans filing claims for jobless benefits edged lower last week, helping to offset recent signs in the U.S. labor market that new claims may be trending slightly higher. still feels like this continuation of the surge that happened toward year-end in 2019," said Ken Polcari, senior market strategist at SlateStone Wealth LLC in Jupiter, Florida.

"You did have some good Chinese data that came out overnight, a positive manufacturing PMI, which is very expansionary and helping fuel the rally."

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 4.51 points, or 0.8%, to an all-time high, while the pan-European STOXX 600 index .STOXX rose 0.93%.

The double dose of Chinese news helped Europe's main markets in London, .FTSE Frankfurt .GDAXI and Paris .FCHI jump 0.82% to 1.06%, outpacing overnight gains in Asia and setting them on course for their best opening day of a year since 2013.

On Wall Street, the Dow Jones Industrial Average .DJI rose 330.36 points, or 1.16%, to 28,868.8. The S&P 500 .SPX gained 27.07 points, or 0.84%, to 3,257.85 and the Nasdaq Composite .IXIC added 119.59 points, or 1.33%, to 9,092.19.

Emerging market stocks rose 1.20%, as the Bovespa index .BVSP in Brazil advanced 2.5% to an all-time high and Mexico's bolsa index .MXX rose 2.1%.

Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.94% higher.

China's blue-chip CSI300 index .CSI300 , one of the world's best performers last year, rose 1.4%, reaching its highest since February 2018. Hong Kong's Hang Seng .HSI added 1.25%. .SS

Alibaba (NYSE: BABA ) Group Holding Ltd BABA.N rose 3.6% on news that China's Ant Financial, an affiliate of the e-commerce giant, has joined the race for a digital banking license in Singapore, the company said in a statement. prices were boosted by doubts about the lasting strength of Wall Street's stock rally, said Jeffrey Christian, managing partner of CPM Group.

"There is nervousness about why the stock markets are as high as they are, given the economic and political environment," Christian said.

U.S. gold futures GCcv1 settled 0.3% higher at $1,528.10 an ounce. Spot gold XAU= hit a three-month high of $1,531.20.

The dollar recovered from a six-month low after a downbeat December left an index that tracks the greenback versus a basket of six major trading currencies near flat at the end of 2019.

The dollar index .DXY rose 0.42%, with the euro EUR= down 0.35% to $1.1171. The Japanese yen JPY= strengthened 0.14% versus the greenback at 108.55 per dollar.

Sterling posted its biggest daily loss in two weeks as euphoria after last month's UK election gave way to anxiety over the risk of a no-deal Brexit at the end of 2020. pound GBP= last traded at $1.314, down 0.86% on the day.

Benchmark 10-year U.S. Treasury notes US10YT=RR rose 10/32 in price to yield 1.8754%.

Germany's 10-year bond yield DE10YT=RR briefly hit -0.16% on optimism better U.S.-China trade relations will spur global growth, denting safe-haven assets. yield on the bund, a benchmark for European lending, soon slid to -0.23%.

Oil prices steadied after early gains as signs of improving U.S.-China trade relations eased demand concerns and rising tensions in the Middle East provided support.

Brent crude futures LCOc1 settled up 25 cents at $66.25 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose 12 cents to settle at $61.18 a barrel.

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