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Global Markets: Stocks extend Fed, data-fueled rally, dollar slides

Reuters  |  NEW YORK 

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - An index of world stocks rose on Monday, extending strong gains logged last week as investors took heart from Friday's robust U.S. employment data and a message from that it would be patient and flexible in policy decisions this year.

Growing bets the Federal Reserve will halt its multi-year rate hike cycle sent the dollar lower across the board, while rising equity markets and support from OPEC production cuts helped lift

MSCI's world equity index, which tracks shares in 47 countries, was up 0.77 percent, its highest since Dec. 19.

On Friday, told the that the is not on a preset path of rate hikes and that it will be sensitive to the downside risks markets are in.

The comments, coming after a robust U.S. jobs report, helped boost risk sentiment and lift stock markets around the world.

On Monday, U.S. stocks edged higher as investors turned their attention to the latest round of U.S.-trade talks and a prolonged government shutdown, halting Wall Street's strong surge from Friday.

U.S. officials are meeting their counterparts in this week for the first face-to-face talks since U.S. and China's agreed in December to a 90-day truce in a trade war that has roiled global markets.

has the "good faith" to work with the to resolve trade frictions, the said on Monday, as the world's two largest economies resumed talks in a bid to end their trade dispute.

"Trade has been one of the big factors, along with the budget stalemate, contributing to the climate of fear that we're seeing," said Scott Brown, at in St. Petersburg,

The Dow Jones Industrial Average rose 74.9 points, or 0.32 percent, to 23,508.06, the S&P 500 gained 14.26 points, or 0.56 percent, to 2,546.2 and the Nasdaq Composite added 58.25 points, or 0.86 percent, to 6,797.11.

European shares were slightly lower amid lingering worries about the euro zone and Brexit. The pan-European STOXX 600 was down 0.29 percent.

In currency markets, the dollar weakened amid diminished expectations for further U.S. interest rate hikes.

The dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies, was down 0.48 percent at 95.722.

"Powell's comments Friday that policymakers were flexible and 'listening carefully' to financial markets helped support the impression that the tightening cycle may slow or pause in the coming months," said Shaun Osborne, at in

Interest rate futures traders are now in a partial rate cut for this year, while the Fed has indicated that two rate hikes are likely.

Gold rose and palladium hit a record high as the weaker dollar spurred demand for the metals from holders of other currencies. Spot gold was up 0.27 percent at $1,288.25 per ounce.

prices erased early gains after a private report released on Monday showed growth of U.S. services industries slowed to a five-month low in December, signalling the world's largest is decelerating faster than economists' forecasts.

Benchmark 10-year notes shed 2/32 in price to yield 2.6640 percent, from 2.659 percent on Friday.

Stable equity markets and production cuts by the Organization of the Petroleum Exporting Countries helped rise for a fifth straight session.

Brent was up $1.66 at $58.72 a barrel. U.S. crude was up $1.64 at $49.6 a barrel.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by in New York and in Bengaluru; Editing by Susan Thomas)

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

First Published: Mon, January 07 2019. 23:29 IST
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