LONDON (Reuters) – Global stocks hit their highest levels in more than three weeks on Tuesday, as investors bet the US Federal Reserve and other central banks meeting this week will maintain accommodative policies to help. to drive a post-pandemic global economic recovery.
European stocks extended a rally that began on Wall Street on Monday and continued in Asia, with the region-wide STOXX 600 index rising 0.6% at noon in London. On Monday, the index hit its highest level in more than a year. [.EU]
The British FTSE 100 index rose 0.9%, reaching its highest level in almost 2 months. Germany’s DAX gained 0.6%, France’s CAC 40 0.2% and Italy’s FTSE MIB 0.6%.
E-mini futures for the S&P 500 hit a record, gaining 0.1%.
MSCI’s All Country World Index, which tracks stocks in 49 countries, rose 0.3% to its highest level since February 22.
“Equity markets have been keeping their spirits ahead of tomorrow’s major Fed announcement,” said Karl Steiner, SEB’s chief quantitative strategist.
An index of Asia Pacific equity markets excluding Japan gained 0.65%, led by a 0.8% rise in Australia’s benchmark S & P / ASX 200 index.
Japan’s Nikkei 225 gained 0.5% to just below the 30,000 mark. The broader Topix added 0.65%.
China’s top-line CSI 300 Index rose 0.87% and Hong Kong’s Hang Seng gained 0.67%.
On Monday, the S&P 500 and the Dow Jones Industrial Average spiked thanks to gains in travel stocks, as mass vaccines in the United States and the passage of a 1.9 aid bill by Congress. trillions of dollars fueled investor optimism.
Longer-term US Treasury yields fell further on Tuesday as the market looked to government debt auctions and the Fed’s two-day policy meeting, which is set to wrap up on Wednesday.
The 10-year benchmark yield, which hit a more than a year high of 1.642% last week, was back at 1.6004%.
The previous increase in yields was due to investors speculating that rising inflation expectations could lead the Federal Open Market Committee to signal that it will start raising rates earlier than expected.
“We believe the FOMC will have a difficult time expressing concern about asset markets with the S&P hitting an all-time high on March 12, even though 10-year US Treasury yields are at highs. post-February 2020, “said Standard analysts Steve Englander and John Davies. Rented.
“Attention has turned to the FOMC ‘dot plot’ in recent days, but if the FOMC and Fed Chairman (Jerome) Powell are not opposed to current performance levels, investors are likely to ramp up. returns as better data comes in, “they added. , in reference to the Fed diagram showing the interest rate expectations of its policy makers.
The Fed’s policy makers are expected to forecast that the US economy will grow in 2021 at the fastest rate in decades, as it recovers from a coronavirus-ravaged 2020.
The Bank of England also meets this week on Thursday and the Bank of Japan concludes a two-day meeting on Friday.
On Wall Street, the Dow Jones Industrial Average rose 174.82 points, or 0.53%, to 32,953.46, the S&P 500 gained 25.6 points, or 0.65%, to 3,968.94 and the Nasdaq Composite fell remained unchanged.
Airline stocks rose as companies signaled concrete signs of an industry recovery as vaccine launches help boost leisure bookings.
Prospects for a post-pandemic recovery continued to diverge between the United States and Europe.
President Joe Biden’s order to make vaccines available to all adults by May 1 contrasts with stuttering launches in Germany, France and elsewhere, where use of the AstraZeneca vaccine was suspended amid concerns about possible side effects.
However, Kyle Rodda, an analyst at IG Markets, said the prospect of a slower economic recovery in Europe did not appear to be a major hurdle for investors.
“It doesn’t seem to be the view that this is a real risk,” he said. “Investors are cautious, but they are not worried.”
In currencies, the US dollar held small gains overnight, with apparent caution ahead of central bank meetings.
The dollar was mostly flat at 109.06 yen, after rising to 109.365 on Monday for the first time since June.
The euro was little changed at $ 1.1946, staying below the $ 1.20 level for an eighth session.
Bitcoin slid 0.5% to $ 55,354.48. The cryptocurrency reached $ 61,781.83 on Saturday.
April US West Texas Intermediate crude changed hands at $ 64.51 a barrel, down 1.3%. May Brent crude futures were at $ 67.88 a barrel, losing 1.34%.
Report by Ritvik Carvalho; Additional reporting by Kevin Buckland and Kane Wu in Tokyo. Larry King and Mark Potter Editing