By Administrator_India
World shares rallied to a record peak on Wednesday, following an overnight surge that saw the Dow Jones benchmark crack 30,000 for the first time as investors cheered a dramatically improved global outlook.
The formal start of U.S. president-elect Joe Biden’s transition to the White House and increasing confidence a COVID-19 vaccine would be ready soon ushered in renewed appetite for global shares.
After weeks of waiting, President Donald Trump’s administration on Monday cleared the way for Biden to prepare for the start of his administration, giving him access to briefings and funding.
“I expect the honeymoon between financial markets and the Biden administration and stocks’ bull trend could continue until around his inauguration in January,” he said, adding reality checks could follow, once he will be sworn in.
Reports that Biden planned to nominate former Federal Reserve Chair Janet Yellen as Treasury Secretary — a move that could shift the focus heavily toward efforts to tackle growing economic inequality — also cheered markets.
That pushed MSCI’s broadest gauge of world stocks up 0.2% to a record level. Its index of Asia-Pacific shares outside Japan gained 0.45% while Japan’s Nikkei rallied 1.7% to a 29-year high.
On Wall Street on Tuesday, the Dow Jones Industrial Average rose 1.54% to 30,046.24 while the S&P 500 gained 1.62%, to 3,635.41, also a record high. The Nasdaq Composite added 1.31%.
E-mini futures for the S&P 500 rose another 0.5% in early Wednesday trade.
U.S. energy shares have risen almost 38% so far this month.
In the currency market, risk-sensitive currencies held an upper hand against safe-haven currencies, including the U.S. dollar.
The euro held firm at $1.1901, near the top of its recent trading range. The British pound stood at $1.3359, near Monday’s two-month high, supported also by hopes of a Brexit deal.
Bitcoin also held firm at $18,999, near its record peak of $19,666 touched almost three years ago.
On the other hand, the yen, seen as a safe harbour currency, was little changed at 104.56 per dollar.
Gold has also lost lustre, having hit a four-month low of $1,800.80 on Tuesday and last stood at $1,806.10 per ounce.
U.S. Treasuries were also pressured by expectations that Yellen’s nomination as Treasury Secretary could ease the passage of a potential fiscal stimulus package, which would mean more debt.
The 10-year U.S. yield rose to 0.885%, compared with Thursday’s low of 0.818%.
Oil prices also held near highest levels since March on the improved global economic outlook.
Brent futures gained 1.2% to $48.45 per barrel, a high last seen in early March.