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Global Markets: World stock rally rolls on with best start in eight years

Reuters  |  LONDON 

By Tommy Wilkes

(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 growth and low powering the appetite for risk.

European stocks jumped by as much as 0.4 percent, hitting their highest levels since August 2015, before easing slightly.

A surprise dip in German industrial orders, which fell in November for the first time since July, appeared unlikely to dent growing confidence in the zone's biggest after a strong run of positive economic

The strong showing in European followed Asia, where benchmarks inched towards all-time peaks. Wall Street last week had posted its best start to a year in more than a decade; Friday's U. S. jobs report, while weaker than expected, encouraged hopes that brisk growth and low can be sustained this year.

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

The U. S. dollar partly recovered on Monday after a weak start to the year, strengthening past $1.20 against the euro, although with bearish positions against the greenback high, many traders are betting on a stronger single

Against a basket of currencies the dollar was up 0.31 percent but close to its weakest level since September.

Positive zone economic data - economic growth in the 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 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 U. S. dollar as we are seeing a recovery led by and and there is a lot of cash sitting on the sidelines, waiting to buy European assets," said Peter Chatwell, of European rates strategy at in

U. S. futures data showed the largest net long position by hedge funds and speculative accounts in the single currency's history in the week to Jan. 2.

zone blue chip stocks were up 0.23 percent, with France's ahead by 0.3 percent and Germany's DAX by 0.31 percent.

"Growth in the area has outpaced the U. S. for the past two years now and on our forecast this outperformance will extend to four years," analysts wrote in a note, calling such a scenario "unprecedented".

In U.

S. markets, Wall Street's best start to a year in more than a decade included the Dow rising 2.3 percent last week and the 2.6 percent. The tech-heavy Nasdaq soared 3.4 percent.

Attention in the U. S. now turns to the quarterly earnings season, the biggest event of this week, with Wall Street expecting solid growth of around 10 percent.

Analysts at Lynch said that the 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 U. S., with 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 U. S. dollar and the rise in growth expectations.

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

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

For Live blog on European and UK stock markets, open a window on Eikon by pressing F9 and type in 'Live Markets' in the

(Reporting by Tommy Wilkes; Additional reporting by and Wayne Cole; Editing by and Peter Graff)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 18:02 IST