LONDON / SHANGHAI (Reuters) – Global equities rose, with the Japanese Nikkei hitting a three-decade high, as US Treasuries extended their steepest sell-off in Friday months as investors watched over Friday. increased coronavirus cases and political unrest in the United States to focus on hoping for an economic recovery later in the year.
Europe’s Euro STOXX 600 was up 0.6%, with the Frankfurt index up 0.8% after German industrial production and exports increased in November.
US e-mini S&P 500 stock futures also indicated a cheery open, up 0.3%.
The optimistic mood emerged after Wall Street hit all-time highs on Thursday, as bond prices fell as markets wagered a new Democrat-controlled US government would lead to heavy spending and borrowing to support economic recovery. of the country.
Investors were also waiting for US non-farm payroll data due later in the day to assess the health of the labor market.
“Investors are buying the end of an erratic Trump administration and are eagerly awaiting something new, which is a Biden presidency and the prospect of a significant spending program,” said Francois Savary, chief investment officer at the Swiss wealth manager. Prime Partners.
“People are looking for cyclical names and this is pushing the market forward, but care needs to be taken as this is based on an economy rebound in the coming quarters.”
The MSCI global equity index, which tracks shares from nearly 50 countries, rose 0.5%, extending its drive to record territory and set to close its best week since late November.
MSCI’s leading emerging markets index closed at a record high for the first time since 2007.
In Asia, South Korea’s Kospi led the way, charging 4% higher, its best daily return in nearly seven months, while the Nikkei added 2.36%, reaching its highest level since August 1990. The average dollar-denominated Nikkei stock rose above the 1989 peak to a record high.
In contrast, China’s blue chip stocks fell 0.3%, down from a 13-year high, after index providers MSCI and FTSE Russell said they would cut three Chinese telecom companies from their benchmarks after closing on Friday in response to a US investment ban.
The announcements, meaning global funds have a day to adjust billions of dollars in passive investments, wiped out a total of $ 5.6 billion from the value of their Hong Kong-traded shares on Friday.
Hong Kong’s Hang Seng grew 1.1% despite reports that the Trump administration was considering banning US entities from invest in an expanded list of Chinese companies in the waning days of his presidency.
On Thursday, the Dow Jones Industrial Average was up 0.69%, the S&P 500 gained 1.48%, and the Nasdaq Composite added 2.56%, with all three indices closing at highs. record closing.
The gains follow expectations that Democratic control of both houses of the US Congress will help President-elect Joe Biden’s party push through more fiscal stimulus and come despite political turmoil in Washington, DC.
US government officials have begun to consider removing President Donald Trump from office before Biden’s January 20 inauguration date, after Trump supporters stormed the United States Capitol building.
Rising risk appetite weighed on bonds, with the yield on benchmark 10-year bonds hitting a new high since March. The ten-year notes fell 1.1% on Friday, up from 1.017% Thursday.
In Europe, Germany’s benchmark 10-year Bund yield fell by 1 basis point to -0.524%.
The dollar almost held its gains, helped by rising yields. The dollar index gained 0.1% against a basket of currencies at 89.875 with the euro down 0.17% to $ 1.2250.
“We are sure to see a synchronized global recovery in the second half of this year,” said ING analyst Carsten Brzeski.
“Right now, there is a lot of concern about the virus and the noise surrounding the vaccine. But we have to have a slightly longer vision. “
Bitcoin cryptocurrency hit a new all-time high, up 5% on the day to $ 41,530, surpassing Thursday’s high, driven by increased demand. from institutional and retail investors. Market watchers said a withdrawal is likely after the recent hike.
In commodity markets, oil traders continued to focus on Saudi Arabia’s commitment to deepen production cuts.
Brent crude was up 1.6% to $ 55.25 a barrel to an 11-month high. US West Texas Intermediate (WTI) was up 1.4% to $ 51.57, also close to 11-month highs.
Spot gold fell 1.1% to $ 1,892.60 an ounce as US dollar and Treasury yields stabilized.
Additional reporting by Imani Moise in New York; Editing by Sam Holmes and Kim Coghill