May 7, 2013
LONDON: World shares hit their highest level in almost five years on Tuesday as last week's strong US jobs report continued to fuel optimism about the health of the global economy.
Japanese stocks jumped in a delayed reaction to the data because Tokyo had been closed for a public holiday on Monday.
May 7, 2013
LONDON: World shares hit their highest level in almost five years on Tuesday as last week's strong US jobs report continued to fuel optimism about the health of the global economy.
Japanese stocks jumped in a delayed reaction to the data because Tokyo had been closed for a public holiday on Monday.
The head of the European Central Bank added to the positive mood by saying it was ready to cut rates again if needed.
Australia's central bank also did its bit to help the economy, cutting rates to a record low on Tuesday and signaling it could do more, helping shares.
"I think the markets are going to continue going higher, the S&P hit another record high on Monday, the DAX is getting closer," said Neil Marsh, strategist at Newedge.
"From a very low base, everyone is fairly optimistic that things are going to improve and if they don't, you've got the added backdrop from (ECB President Mario) Draghi that he'll do whatever it takes to push the euro zone economy forwards."
The Nikkei stock average soared 3.7 per cent and the MSCI global index, which tracks stocks in 45 countries, rose 0.3 per cent, both the highest since June 2008.
European equities also nudged up as trading gathered momentum, bolstered by a crop of better than expected corporate earnings and with the German DAX index closing in on its own record high of 8,151,57 set back in 2007.
Monday's comments from Draghi that the ECB would cut rates again if needed, including pushing its key deposit rate into negative territory, kept downward pressure on the euro as it hovered little changed on the day at $1.3075.
The prospect of negative euro zone rates continued to underpin the bloc's bond markets too with the benchmark German Bund a tick lower on the day at 146.15.
The main focus for Asian currency markets was the Reserve Bank of Australia's policy meeting, at which the bank decided to lower its cash rate by 25 basis points to a record low 2.75 per cent.
Markets had priced in a 50-50 chance of a rate cut, and the decision sent the Australian dollar down to a two-month low of $1.0810 and helped Australian shares trim earlier losses.
Investors are now waiting for a batch of April data from China, the world's second-largest economy, for more clues on global growth. Chinese trade data will be released on Wednesday, inflation on Thursday and money supply and loan growth expected from Friday.
Courtesy: Reuters
