LONDON (Reuters) – Global equities rose for the fourth consecutive day on Tuesday and oil followed suit as hopes for new US stimulus ushered in a strong end of the year for riskier assets with the dollar targeting two and a half years low.
The MSCI World Index was up 0.4% at 1203 GMT, while U.S. stock futures pointed to a similar movement at the opening on Wall Street, following broad-based gains in Europe and overnight in Asia.
Across Europe, Britain’s first-tier stocks led regional markets upward on the first day of trading since the Christmas Eve deal with the European Union.
The FTSE 100 rose 2.1%, underway for its fourth consecutive day of earnings, led by companies in a number of sectors that are likely to benefit from the deal, including Intertek and Diageo.
“Multinationals, which are the most likely beneficiaries of friction-free, tariff-free and foreign currency earners are generally leading the charge on the FTSE 100,” said Russ Mold, director of investments at AJ Bell.
Sustaining the London market, there were banks and other financial services.
“This suggests that nerves remain over which deal will be closed in 2021 when it comes to financial services and, in fact, services in general.”
Also among the winners was the pharmaceutical company AstraZeneca, driven by the news that its vaccine COVID-19 is expected to be approved for emergency use within a few days by the UK government.
The launch of the European Union’s vaccination program, hoping to end the widespread blockages that paralyzed economies across the bloc, showed the positive sentiment shared with the continent, where defeated stocks of travel and leisure increased 2.3%.
Global stock gains and the likely further opening of the U.S. stock market continue to be sustained by the hope that a $ 2.3 trillion stimulus package signed by President Trump on Sunday will be approved by the Senate.
The package covers $ 1.4 trillion in spending to fund government agencies and $ 892 billion in relief from COVID-19, including $ 2,000 in relief checks to help cushion the economic impact of the pandemic.
The prospect of higher demand helped to boost oil prices with Brent and US West Texas Intermediate oil futures both up 1.2%.
Demand for riskier assets weakened the US dollar, which is often seen as a safe haven asset. It fell 0.2% compared to a basket of currencies and eyeing the 18-month low hit in November.
Shorting the dollar has been a popular business. Reuters calculations based on data released by the Commodity Futures Trading Commission on Monday suggested that the trend would persist. Dollar short positions increased in the week ending December 21 to $ 26.6 billion, the highest in three months.
Among other currencies, the pound rose 0.4% against the dollar, reversing two days of losses, while the euro rose for the third consecutive day, up 0.3%, also partly driven by rumors of a trade pact EU-China.
European government debt yields fell, with yields on 10-year German bonds by 0.57% and riskier yields in Italy, Spain and Portugal also fell.
A weak dollar boosted gold prices, which rose 0.4%. [GOL/]