LONDON (Reuters) – Global equities rose on Tuesday for the fourth day in a row, and oil followed suit, while hopes for a new US stimulus saw a strong end to the year for riskier assets and a two-and-a-half-year dollar minimum.
The MSCI World Index rose 0.4% to 1010 GMT, recently extending its rally after gains in Asia, where Japanese equities hit a 30-year high. The broadest MSCI index of Asia-Pacific equities outside Japan rose 0.5%.
Early gains in Europe had a broad base, with all major indices rising, driven by blue-chip stocks in the UK. They grew on their first day of trading since the Christmas Eve agreement of a trade agreement with the European Union.
The FTSE 100 rose 2.4%, the fourth consecutive day of earnings, led by companies in a number of sectors that could benefit from the transaction, including Intertek and Diageo.
“Multinationals, which are the most likely beneficiaries of trade without fractions, without tariffs and foreign currency winners, generally drive the tax in FTSE 100,” said Russ Mold, investment director at AJ Bell.
Banks and other financial services have supported the London market.
“This suggests that we remain nervous about the agreement that will be reached in 2021 when it comes to financial services and, indeed, services as a whole.”
Also among the winners was the AstraZeneca doctor, backed by the news, his COVID-19 vaccine will receive emergency approval for use in a few days by the British government.
The launch of the European Union’s vaccination program, in hopes of ending the large-scale blockages that have blocked economies across the bloc, has seen that positive sentiment shared with the continent, where beaten travel and leisure stocks have risen by 2%.
US futures also indicate a 0.5% higher opening on Wall Street later that day, backed by hopes that a $ 2.3 trillion stimulus package signed into law by President Trump on Sunday will be approved by the Senate.
The package covers $ 1.4 trillion in funding for government agencies and $ 892 billion in COVID-19 aid, including $ 2,000 aid checks to help cushion the economic impact of the pandemic.
The prospect of rising demand has contributed to rising oil prices, with Brent crude and US broker West Texas rising, both by about 1.3%.
Demand for riskier assets has weakened the US dollar, which is often seen as a safe haven asset. It fell 0.2% against a basket of currencies and saw the 18-month low hit in November.
Dollar shortening has been a popular occupation. Reuters’ calculations based on data released Monday by the commission for futures trading of the goods suggested the trend would continue. Short positions in the dollar swelled in the week ended December 21 to $ 26.6 billion, the highest in three months.
Among other currencies, the pound rose 0.2% against the dollar, reversing two days of losses, although it fell from its previous high. The euro rose for the third day in a row, up 0.3%, partly supported by talks on an EU-China trade pact.
European government debt yields fell, with German 10-year bond yields down 0.57% and riskier yields in Italy, Spain and Portugal also lower.
A slow dollar supported gold prices, which rose 0.5% to $ 1,878.9 an ounce. [GOL/]