Benchmark US stock indices rose to record highs yesterday, buoyed by the prospect of continued Federal Reserve stimulus, while the dollar slipped and global equity markets climbed, driven by economic reform plans in China.
The Dow and S&P 500 surged past the 16,000 and 1,800 milestones, respectively, but both US indices pared some gains soon after markets opened.
Round numbers often act as resistance points for chartists, but clearing them can also provide momentum for investors eager to chase performance.
Chinese shares listed in Hong Kong posted their biggest gain in nearly two years, driving the safe-haven dollar and Japanese yen lower after China announced its biggest reforms in nearly 30 years.
The reform plans boosted investor appetite for higher-yielding currencies such as the Australian and New Zealand dollars.
The growth-linked currencies outperformed as global liquidity and promises to keep interest rates low keep weighing on the low-yielding US dollar and the yen.
The China Enterprises Index of the top listings in Hong Kong soared 5.7 per cent for its biggest daily gain since December 1, 2011.
Germany’s DAX hit intraday and closing record highs as European shares resumed their rally on an improving outlook for the eurozone economy.
MSCI’s all-country world stock index rose 0.52 per cent, while the pan-European FTSEurofirst 300 index rose 0.51 per cent to close at a provisional 1,304.45.
The Dow Jones industrial average was up 47.76 points, or 0.30 per cent, at 16,009.46. The Standard & Poor’s 500 Index was up 0.99 points, or 0.06 per cent, at 1,799.17. The Nasdaq Composite Index was down 2.95 points, or 0.07 per cent, at 3,983.02.
Gold fell as a rebound in equities and lackluster physical demand prompted traders to cash in three days’ of gains, though expectations the Fed’s policy will stay loose lent support. US Treasury debt prices rose, supported by the prospect of the Fed’s continued “easy” monetary policy.
The euro drew some support after data showed the eurozone’s trade surplus grew more than expected in September. The euro was up 0.18 per cent at 1.3519.