Financial business

Global equities draw inspiration from strengthening Wall Street

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MILAN – European and Asian stocks edged higher on Tuesday, helped by another record-breaking day on Wall Street and after Britain and France refrained from imposing more COVID restrictions before year-end.

Asset classes, from oil to stocks, are near or above recent highs, having recouped losses at the end of November when the Omicron variant of COVID-19 sent investors scrambling for safety.

As the worst fears about the impact of the new variant subsided, investors returned to risky assets.

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The MSCI global equity index rose 0.2% at 11:42 a.m. GMT, a striking distance from a record set last month, as Asia and Europe rose after the 69th record high on Monday of All Time closed this year for the S&P 500.

US index futures rose 0.2-0.4% before the spot market opened.

The European equity benchmark STOXX 600 rose 0.5% to its highest level since November 19, while Japan’s Nikkei rose 1.4% to a one-month high and l The MSCI’s largest Asia-Pacific stock index outside of Japan gained 0.5%.

“The latest rebound in risky assets was activated last week by new reports confirming that the variant of the Omicron coronavirus, although more transmissible … leads to fewer hospitalizations and deaths,” said Charalambos Pissouros, head of research at within the Cyprus-based brokerage group JFD.

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The London Stock Exchange was closed for a holiday, reducing activity in the region’s stock markets.

China reported 209 new confirmed cases of the coronavirus as of December 27, up from 200 a day earlier, mainly in the northwestern province of Shaanxi, where Xian, the provincial capital, is in detention.

In Europe, the British government has said England will not get any new COVID-19 restrictions until the end of 2021, while the French government has said it will tighten measures, although there are no New Year’s Eve curfew and that schools will reopen as planned in early January.

The MSCI Global Equity Index has risen over 17% so far this year, and looking to 2022, investors are wary of the risks associated with rising price pressures, slower growth in stocks. corporate earnings and the likelihood of a rate hike cycle in the United States.

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“Money growth will slow down in 2022, but the market strongly doubts that the ECB and the Fed are prepared to really tighten financial conditions,” said Arne Petimezas, analyst at AFS Group in Amsterdam. “They are now faced with a trade-off between controlling inflation or maintaining this party.”

The S&P rose 1.4% to close at a record high Monday as strong retail sales underscored economic strength, and the Dow Jones rose 1% and the Nasdaq 100 added 1.6%.

Oil extended its gains despite the Omicron’s rapid spread, supported by supply disruptions and expectations of a drop in US inventories last week.

Brent crude rose 1.5% to $ 79.75 a barrel and US crude gained 1.6% to $ 76.77 a barrel.

Meanwhile, the safe haven yen slipped to a one-month low at 114.94 to the dollar and was the last small change of the day.

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The dollar, also a safe haven, was in a range, despite a hawkish turn by the Federal Reserve this month that saw policymakers signaling three-quarter point rate hikes in 2022.

The dollar index, which measures the currency against six major peers, was just below parity at 96.02. The pound rose 0.1% to a new five-week high. The euro was little changed and the risk-sensitive Australian dollar rose 0.2%.

Bitcoin fell below $ 50,000 and fell 3%.

In debt markets, 10-year US Treasury yields remained below Thursday’s high of just over 1.5%. The German 10-year rate, the benchmark for the euro zone, gained 2 basis points to -0.226%.

Spot gold rose 0.3% to its highest level in more than a month at $ 1,816.60 an ounce as the US dollar weakened.

(Report by Danilo Masoni in Milan and Alun John in Hong Kong Editing by Bernadette Baum and Alexander Smith)

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