NEW YORK: World stocks neared a two-year high on Tuesday, Nov 2 on stronger-than-expected economic data while the dollar fell as investors anticipated the US central bank will open the money spigot to spur the flagging US economy.
US stocks also got a boost from investors' expectations of strong Republican gains in Congress halfway through the term of Democratic US President Barack Obama. Shares in sectors such as healthcare, deemed likely to benefit from the rebalancing of power, advanced.
In campaigns, Republicans accused Democrats of stifling business with regulations and failing to extend tax cuts, while Democrats countered with claims that Republicans blocked economic recovery programs.
"I think it is people trying to get in front of what they think will be the election results," said Rick Meckler, president of investment firm LibertyView Capital Management in New York, in reference to expectations of Republicans' gains.
Japanese stocks were set for a strong opening, with Nikkei futures traded in Chicago jumping 85 points to 9,225.00.
The dollar fell against a basket of major currencies, with the US Dollar Index down 0.74%. A drop in the greenback makes dollar-denominated commodities, including oil, cheaper for non-US investors. US crude oil futures for December delivery gained 95 cents, or 1.15%, to settle at US$83.90 (RM258.41) a barrel.
European equities hit a six-month closing high on Tuesday, lifted by energy companies after the price of oil rose.
Eurozone manufacturing picked up its pace last month, a business survey showed Tuesday, one day after better-than-expected US and Chinese factory data increased optimism about the global economy and revived risk appetite.
"From a global perspective, the growth outlook looks solid and that's feeding some appetite for risk," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said.
The MSCI world equity index rose 0.84% to 319.45, a whisker shy of the two year-high of 319.84 hit on Oct. 25.
The FTSEurofirst 300 index of top European shares rose 0.52% to end the day at 1,093.65 points, its highest close since late April.
The euro traded above US$1.40, buoyed by the European economic data. But traders doubted it would be able to stay above this level due to uncertainty over the extent of the Fed's asset purchases. The Fed announcement is expected on Wednesday at the end of a two-day policy meeting.
Markets have priced in Fed asset buying of US$100 billion a month for five months, in an attempt to bring long-term interest rates even lower and stimulate a sluggish US economy.
The size of the Fed's programme is key. A larger-than-expected programme of asset buying, which has been described as printing money, would weigh on the dollar and boost commodity prices, while a smaller round of purchases could curb investors' appetite for risk.
On Wall Street, the Dow Jones Industrial Average rose 64.10 points, or 0.58%, to end at 11,188.72, while the Standard & Poor's 500 Index gained 9.19 points, or 0.78%, to 1,193.57. The Nasdaq Composite Index climbed 28.68 points, or 1.14%, to close at 2,533.52.
Most gains came from sectors expected to benefit from a rebalancing of power in the US Congress. Among those expected to thrive if Republicans regain control of Congress are the health insurers, a sector hurt by the Democrats' push to reform healthcare. Republicans have vowed to repeal the healthcare reform law.
Prices of US Treasuries climbed on talk about the size of the Fed's expected bond-buying programme. The benchmark 10-year US Treasury note gained 10/32, with the yield at 2.592%.
On Monday, a Reuters/Ipsos poll found Republicans are poised to take control of the House, gaining at least 50 seats, but they are unlikely to win a majority in the Senate.
In foreign currency trading, the euro rose 1.04% to US$1.4034 from a previous session close of US$1.3889.
Against the Japanese yen, though, the dollar was up 0.17% at ''80.62 (RM3.08).
Spot gold benefited from the dollar's decline against a basket of major currencies. The price of the metal rose 0.38% to US$1,355.90 an ounce. ' Reuters
US stocks also got a boost from investors' expectations of strong Republican gains in Congress halfway through the term of Democratic US President Barack Obama. Shares in sectors such as healthcare, deemed likely to benefit from the rebalancing of power, advanced.
In campaigns, Republicans accused Democrats of stifling business with regulations and failing to extend tax cuts, while Democrats countered with claims that Republicans blocked economic recovery programs.
"I think it is people trying to get in front of what they think will be the election results," said Rick Meckler, president of investment firm LibertyView Capital Management in New York, in reference to expectations of Republicans' gains.
Japanese stocks were set for a strong opening, with Nikkei futures traded in Chicago jumping 85 points to 9,225.00.
The dollar fell against a basket of major currencies, with the US Dollar Index down 0.74%. A drop in the greenback makes dollar-denominated commodities, including oil, cheaper for non-US investors. US crude oil futures for December delivery gained 95 cents, or 1.15%, to settle at US$83.90 (RM258.41) a barrel.
European equities hit a six-month closing high on Tuesday, lifted by energy companies after the price of oil rose.
Eurozone manufacturing picked up its pace last month, a business survey showed Tuesday, one day after better-than-expected US and Chinese factory data increased optimism about the global economy and revived risk appetite.
"From a global perspective, the growth outlook looks solid and that's feeding some appetite for risk," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said.
The MSCI world equity index rose 0.84% to 319.45, a whisker shy of the two year-high of 319.84 hit on Oct. 25.
The FTSEurofirst 300 index of top European shares rose 0.52% to end the day at 1,093.65 points, its highest close since late April.
The euro traded above US$1.40, buoyed by the European economic data. But traders doubted it would be able to stay above this level due to uncertainty over the extent of the Fed's asset purchases. The Fed announcement is expected on Wednesday at the end of a two-day policy meeting.
Markets have priced in Fed asset buying of US$100 billion a month for five months, in an attempt to bring long-term interest rates even lower and stimulate a sluggish US economy.
The size of the Fed's programme is key. A larger-than-expected programme of asset buying, which has been described as printing money, would weigh on the dollar and boost commodity prices, while a smaller round of purchases could curb investors' appetite for risk.
On Wall Street, the Dow Jones Industrial Average rose 64.10 points, or 0.58%, to end at 11,188.72, while the Standard & Poor's 500 Index gained 9.19 points, or 0.78%, to 1,193.57. The Nasdaq Composite Index climbed 28.68 points, or 1.14%, to close at 2,533.52.
Most gains came from sectors expected to benefit from a rebalancing of power in the US Congress. Among those expected to thrive if Republicans regain control of Congress are the health insurers, a sector hurt by the Democrats' push to reform healthcare. Republicans have vowed to repeal the healthcare reform law.
Prices of US Treasuries climbed on talk about the size of the Fed's expected bond-buying programme. The benchmark 10-year US Treasury note gained 10/32, with the yield at 2.592%.
On Monday, a Reuters/Ipsos poll found Republicans are poised to take control of the House, gaining at least 50 seats, but they are unlikely to win a majority in the Senate.
In foreign currency trading, the euro rose 1.04% to US$1.4034 from a previous session close of US$1.3889.
Against the Japanese yen, though, the dollar was up 0.17% at ''80.62 (RM3.08).
Spot gold benefited from the dollar's decline against a basket of major currencies. The price of the metal rose 0.38% to US$1,355.90 an ounce. ' Reuters
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