GLOBAL MARKETS-Stocks surge as hopes grow for U.S. stimulus

  • Reuters
  • Stock Market News
GLOBAL MARKETS-Stocks surge as hopes grow for U.S. stimulus
Credit: © Reuters.

* Revived hopes for U.S. stimulus boosts morale

* Biden victory getting priced into markets, analysts say

* Oil, gold prices gain

* European shares open higher

* China shares, yuan jump after a week-long holiday

* Euro zone periphery govt bond yields: http://tmsnrt.rs/2ii2Bqr

By Tom Arnold and Hideyuki Sano

LONDON/TOKYO, Oct 9 (Reuters) - World shares pushed on from one-month highs, with Asian stocks closing in on two-and-a-half-year highs, as expectations grew of a Democratic victory in U.S. elections next month, reviving hopes for more U.S. stimulus.

A widening lead for Democratic presidential candidate Joe Biden and the possibility his party will win both the Senate and the White House in the Nov. 3 vote has raised the prospect of a big economic stimulus.

The possibility of stimulus is also helping to counter investor wariness about a Democrat pledge to hike corporate tax rates.

The pan-European STOXX 600 index .STOXX rose 0.3%, set for its second straight week of gains. Wall Street futures ESc1 were up 0.4%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.3%, inching closer to its Aug. 31 peak, which was its highest level since March 2018. China's CSI300 index .CSI300 gained 2% after the Golden Week holidays.

Japan's Nikkei .N225 dipped 0.1% after reaching a seven-and-a-half-month high.

The MSCI world equity index .MIWD00000PUS , which tracks shares in 49 countries, was up 0.1% at a more than one month high.

On Wall Street on Thursday, the S&P 500 .SPX gained 0.80% and the Nasdaq Composite .IXIC added 0.5%.

In a sign markets are pricing in a Biden victory, clean energy-related shares have outperformed in recent weeks. The iShares Global Clean Energy ETF (NYSE: XLE ) ICLN.O has gained 14% so far this month, compared with 4% gains in the S&P 500 energy index.

"Biden seems to have a clear lead following the TV debate and a coronavirus cluster in the White House, which has raised questions about Trump's crisis management capabilities," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

A new Reuters/Ipsos poll found Americans are losing confidence in U.S. President Donald Trump's handling of the coronavirus pandemic. His net approval on the issue that has dropped to a record low. November contract of Volatility Index futures VXX0 dropped to 30.25, its lowest level in three weeks, another sign of reduced worries about a contested election.

"The rise in U.S. yields, particularly at the long end, suggests increased expectations of a blue wave in the election," said Koichi Fujishiro, economist at Dai-ichi Life Research Institute.

The 10-year U.S. Treasuries yield has risen 8.5 basis points so far this week, to 0.779% US10YT=RR . It hit a four-month high of 0.797% on Wednesday, but has slipped in part due to weak economic data.

The 10-year German bond yield was unchanged at -0.525% DE10YT=RR . Other core yields were a touch lower FR10YT=RR , BE10YT=RR . on Thursday showed the number of jobless claims in the U.S. came in 20,000 higher than economists expected at 840,000, showing unemployment in the world's largest economy remains historically high and a recovery in the labour market is losing momentum. the World Health Organization reported a record one-day increase in global coronavirus cases on Thursday, led by a surge of infections in Europe.

In the currency market, the dollar weakened against most other currencies, easing 0.1% against a basket of currencies =USD at 93.47 and down 0.4% for the week, the second week of declines in a row. It reached a two-month high at 94.75 in late September. Chinese yuan was the biggest beneficiary of the rising hopes of a Biden win, posting its biggest daily rise in more than four years after the holidays.

The yuan CNY=CFXS was last up 1.2% at 6.7112 per dollar in onshore trade and up half a percent to 6.7024 per dollar offshore CNH=D3 .

The euro EUR=EBS rose 0.1% to $1.1776, while sterling GBP=D3 added 0.2% to $1.2961 but fell against the euro after worse-than-expected UK gross domestic product data.

Oil prices edged up, propelled by supply outages caused by a storm in the Gulf of Mexico and a strike of offshore workers in Norway. Both benchmark contracts were on course for their biggest weekly gains since early June. O/R

Brent LCOc1 was up 16 cents at $43.50 a barrel. U.S. West Texas Intermediate crude CLc1 rose 14 cents to $41.33.

A weaker dollar boosted gold XAU= , which gained 1.1% to $1,914.28 per ounce. Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Emerging markets

http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j Stocks versus COVID

https://tmsnrt.rs/2GCoYoa

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  • Qedimpi Sithole @Qedimpi Sithole
    usd will gain strenth over euro
    Like 0