World shares rose to new all-time highs overnight and European indexes strengthened, with market sentiment generally upbeat on the prospect of fiscal stimulus and vaccine rollouts and ahead of a speech by U.S. Federal Reserve Chair Jerome Powell, Reuters reported.
The MSCI world equity index, which tracks shares in 49 countries, was up 0.2% at 0833 GMT, having touched new peaks shortly before.
Overnight, MSCI’s ex-Japan Asian shares index also broke above its previous high hit in January..
European indexes strengthened after a shaky start, with the STOXX 600 and London’s FTSE 100 both up 0.2%.
The dollar slipped slightly against a basket of currencies, down 0.2% at a two-week low of 90.263.
“The reflation rally continues and interestingly with the dollar now weakening which suggests inflows into Asia are being recycled,” wrote Sebastien Galy, senior macro strategist at Nordea Asset Management in an emailed note.
“Eventually, the reflation in commodities will start to affect real economic activity and create a negative feedback loop, especially oil,” he said.
Oil prices rose overnight but steadied as European markets opened.
Brent has risen for eight days in a row, the longest sustained run of gains since January 2019, while U.S. oil gained for seven days, the longest rally since February 2019.
China’s consumer price index fell more than expected, but factory prices posted their first year-on-year rise in 12 months, suggesting gathering momentum in the industrial sector. up.
Chinese stocks rose to multi-year highs on the last trading day before the week-long lunar new year holidays
“China has been able to recover quickly because it controlled the pandemic quickly, which enabled it to fill the gap caused by production bottlenecks in countries where COVID-19 restrictions were still in place,” Marcin Adamczyk, head of emerging markets debt at NN Investment Partners, wrote in a note.
U.S. President Joe Biden said on Tuesday he agreed with a proposal by Democratic lawmakers that would limit or phase out stimulus payments to higher-income individuals as part of his $1.9 trillion COVID-19 relief bill.
The U.S. government will begin shipping COVID-19 vaccines directly to community health centres next week, as part of Biden’s goal of administering 100 million doses of the vaccine in his first 100 days in office.
Earnings also contributed to market optimism. Japan’s Toyota hiked its full-year earnings forecasts by 54% to a record $19 billion.
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