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World stocks enjoy best start to year since 2010; oil prices pause

Wall Street last week posted its best start to a year in more than a decade

Reuters  |  London 

World stocks
Photo: Reuters

World stock hovered close to all-time highs on Monday as the best start to a year in eight years showed little sign of running out of steam, with the combination of strong global growth and low inflation powering the appetite for risk.

European opened higher, hitting their highest levels since August 2015, while Asian inched towards all-time peaks.

Wall Street last week posted its best start to a year in more than a decade; Friday's US jobs report, while weaker than expected, encouraged hopes that brisk growth and low inflation can be sustained this year.

The world index was flat, just below record highs. It has gained 2.5 per cent in the first five trading sessions of the year, its best start since 2010, according to Thomson Reuters data.

The US dollar recovered after a weak start to the year, strengthening past the key level of $1.20 against the euro, although with bearish positions against the greenback high, many traders are betting on a stronger single currency.

Positive euro zone economic data - with economic growth in the euro zone is on its best run in a decade - has helped the euro, and investors globally wanting exposure to the economic recovery in the region have piled into European assets.

The synchronised global recovery has prompted central banks across the world to follow the Federal Reserve's lead and start moving towards tighter monetary policy in recent months, supporting their currencies against the dollar.

"The overall trend is minutely supportive for the US dollar as we are seeing a global recovery led by and and there is a lot of cash sitting on the sidelines, waiting to buy European assets," said Peter Chatwell, head of European rates strategy at Mizuho in

Euro zone blue chip were up 0.23 per cent, with France's CAC 40 ahead by 0.3 per cent and Germany's DAX ahead by 0.31 per cent.

Wall Street has already enjoyed its best start to a year in more than a decade, with the Dow up 2.3 per cent last week and the S&P 500 2.6 per cent. The tech-heavy Nasdaq led the charge with a rise of 3.4 per cent.

Attention in the US will turn to the quarterly earnings season, which kicks off this week with the Street expecting solid growth of around 10 percent.

Analysts at Lynch said that the global economy had entered 2018 "firing on all cylinders".

"This growth is keeping our quant models bullish and driving earnings revisions to new highs," they added. "We stay long outside the US, with Asia ex-and Nikkei our growth plays, still for yield."

In commodity markets, many commodities paused after the recent run-up in prices, supported by a broadly weak US dollar and the rise in global growth expectations.

held just below the near-three-year highs hit last week. A slight decline in the number of US rigs drilling for new production kept in check.

Gold prices dipped after the dollar gained, with spot prices down 0.1 per cent. The precious metal has posted four consecutive weeks of gains.

First Published: Mon, January 08 2018. 16:48 IST