World shares smashed records on Wednesday as US equities advanced and European stocks closed higher on investor optimism in the new year, while the dollar rallied against key currencies ahead of minutes from last month's Federal Reserve meeting.
MSCI's gauge of stocks, which tracks shares in 47 countries, gained 0.40 per cent. In 2017, the index's best year since 2009, it set scores of record highs and rose by one-fifth in value.
US equities also climbed to fresh highs on Wednesday, propelled by tech stocks. The benchmark S&P 500 breached the 2,700 mark for the first time, while the Nasdaq Composite and the Dow Jones Industrial Average also broke records.
Technology companies Oracle and IBM rose 2.47 per cent and 2.92 per cent, respectively, following brokerage upgrades. The shares helped boost the S&P technology index 0.86 per cent.
The Dow Jones Industrial Average rose 45.72 points, or 0.18 per cent, to 24,869.73, the S&P 500 gained 12.81 points, or 0.48 per cent, to 2,708.62 and the Nasdaq Composite added 47.74 points, or 0.68 per cent, to 7,054.64.
Tuesday, the first day of trading in 2018, saw a strong start for the indices, with the S&P and the Nasdaq hitting record closing highs.
“We had a strong start and we are likely to see a follow through in the near-term,” said Scott Brown, the chief economist at Raymond James in St Petersburg, Florida.
In Europe, shares closed higher after a rising dollar boosted exporters and Wall Street records lifted optimism as new European MiFID II market rules took hold.
The pan-European STOXX 600 index was up 0.48 per cent.
Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.46 per cent higher as manufacturing surveys pointed to a strong start for the European economy. Emerging stocks rose 0.58 per cent, and Japan's Nikkei lost 0.08 per cent.
The dollar index rose 0.24 per cent, snapping a three-week losing streak, after stronger-than-forecast US manufacturing and construction data.
The Japanese yen weakened 0.04 per cent vs the dollar at 112.35, while sterling was last trading at $1.3518, down 0.50 per cent on the day. The euro was down 0.27 per cent to $1.2025.
Benchmark US Treasury 10-year notes last rose 5/32 in price to yield 2.4471 per cent, from 2.465 per cent late on Tuesday.
Investors were awaiting the release yesterday of minutes from last month's Federal Reserve meeting, at which Fed policy makers decided to raise short-term interest rates for a third time in 2017. “There’s a lot of focus around the discussion of the potential impact of the tax bill,” said Bill Northey, a senior vice president at US Bank Wealth Management in Helena, Montana.
“There had to be discussion around the economic impacts. That’s going to be one of the clear pieces of information value that we can draw from these minutes.”
Elsewhere, oil prices hit two-and-a-half-year highs.