US and European shares rose yesterday, with Wall Street’s three main stock indexes hitting record highs for a second straight day, on expectations that markets would benefit from US President-elect Donald Trump’s policies.
The Dow topped 19,000 points and the S&P 500 moved past 2,200 points for the first time ever, while the pan-European STOXX 600 index and the FTSEurofirst 300 of top regional shares climbed to their highest levels since November 10.
US shares have rallied since the November 8 US election as Mr Trump has promised tax cuts, higher spending on infrastructure and simpler regulations in the banking and healthcare industries.
A sharp rally in metals prices and mining stocks boosted European shares as the recent trend of a rotation to cyclical plays continued. The European Basic Resources index, gained more than three per cent after prices of major industrial metals such as copper and aluminium increased.
MSCI’s all-country world equity index rose 0.98 points or 0.24 per cent, to 413.28.
The Dow Jones industrial average was last up 29.45 points, or 0.16 per cent, at 18,986.14. The S&P 500 was up 1.27 points, or 0.06 per cent, at 2,199.45. The Nasdaq Composite was up 11.64 points, or 0.22 per cent, at 5,380.50. Europe’s broad FTSEuro_first 300 index added 0.24 per cent, at 1,345.66.
The dollar rose, helped by a surge in US existing home sales last month that further cemented expectations not only of an interest rates hike in December, but also of further tightening next year.
The dollar hit 111.35 yen, just below Monday’s nearly six-month high of 111.36 yen.
Oil prices were little changed after earlier rising to their highest levels this month, with US crude touching $49.20 a barrel before dipping lower and benchmark Brent crude hitting $49.96.
A growing consensus emerged in the market that Opec would overcome internal disputes and strike a deal to reduce crude output.
Brent crude was last down 12 cents, or 0.25 per cent, at $48.78 a barrel. US crude was last down 41 cents, or 0.85 per cent, at $47.83 per barrel.
US Treasuries were relatively steady before the Treasury Department’s auction of $34 billion in five-year notes, after two-year note yields earlier on Tuesday rose to a more than six-year high of 1.1070 per cent.
New supply has weighed on shorter-dated debt at the same time as investors are increasingly nervous about impending interest rate hikes.
Gold edged lower on reduced appetite for safe-haven assets. Spot gold prices were last down $4.05, or 0.33 per cent, at $1,209.61 an ounce.