Markets are ending 2017 in a party mood after a pick-up in global growth boosted corporate profits and commodities, while tame inflation kept central banks from snatching away the punch bowl of easy monetary policy.
MSCI’s world equity index, which tracks 47 countries, inched up 0.13 per cent, and was poised to add a 14th straight month of gains to put it at an all-time high. The index gained 22 per cent for the year.
Emerging markets have led the charge with gains of 34 per cent. Hong Kong surged 36 per cent, South Korea climbed 22 per cent, India rose 28 per cent and Poland made 27 per cent in local currency terms.
Japan’s Nikkei and the S&P 500 are both ahead by almost 20 per cent, while the Dow has risen by a quarter. In Europe, the UK FTSE has lagged behind a little with a rise of nearly eight per cent.
Yet after a strong run-up there may be little room for error.
US stock markets opened lower yesterday, trimming their strong gains for the year.
The Dow Jones Industrial Average fell 31.83 points, or 0.13 per cent, to 24,805.68, the S&P 500 lost 2.47 points, or 0.09 per cent, to 2,685.07 and the Nasdaq Composite dropped 17.75 points, or 0.26 per cent, to 6,932.41.
US dollar bulls have not been fortunate this year. The widely held assumption at the start of the year was that, with the Federal Reserve set to raise interest rates further and lawmakers poised to cut taxes, the only way for the dollar was up.
Yet even though the Fed delivered on its three promised hikes and a Tax Bill was signed into law last week, the currency has failed to benefit.
Measured against its major peers the dollar has shed nearly 10 per cent this year, putting it on track for its biggest annual loss since 2003. The dollar index fell 0.44 per cent for the day.
Among the winners have been emerging markets and the euro, which is ahead almost 14 per cent for the year and has turned in its best annual performance since 2003.
Oil prices were near their highest in 2-1/2 years after data showed strong demand for crude imports in China and a surprise fall in US production.
US crude rose 0.45 per cent to $60.11 per barrel and Brent was last at $66.47, up 0.47 per cent on the day.