Global stocks remained on their record-breaking run on Tuesday, January 16, as a result of healthy run on Asia and Europe’s big bourses.
MSCI’s all-country world index .MIWD00000PUS notched its third consecutive all-time high as growing confidence about the global economy pushed Japan’s heavyweight Nikkei .N225[.T] to its best level since 1991 during a lively Asian session.
The pan-European STOXX 600 [.EU] then crawled 0.4 percent higher STOXX as technology, car and insurance stocks .SX7P offset a 1 percent drop in miners .SXPP caused by the buckling metals prices. [MET/L]
Copper slumped 2.2 percent CMCU3, while nickel plunged almost 4 percent CMNI3. For both it was their biggest drop since early December, after which they went on to surge 10 and 20 percent respectively.
Analysts put the wobble partly down to supply issues after stockpiles of iron ore at China’s ports leapt to the highest since at least 2004, but also the dollar — used to price commodities — pulling out of a four-day dive.
“Everything this year (in commodity markets) has been largely about the dollar,” said Crédit Agricole FX Strategist Manuel Oliveri.
“It has been selling off regardless of rate expectations, regardless of the growth outlook,” he added, saying he expected it to start to stabilize.
The steadier dollar also brought an end to the euro’s four-day hot-streak though there were other factors at play too.
Wall Street was set to keep the global stocks rolling with futures markets pointing to 0.5 percent to 0.9 percent gains for the S&P 500 ESc1, Dow 1YMc1 and Nasdaq NQc1 which had been closed for a public holiday on Monday.
Overnight moves in Asia included a 1 percent jump by Japan’s Nikkei .N225 that saw it touch its highest since November 1991 and more gains for high-flying Chinese bourses. [.SS]
Australian shares had stumbled 0.5 percent though as its heavyweight miners .AXMM were bruised by the slide in metals prices.
Japanese Finance Minister Taro Aso said on Tuesday that he did not see problems with the dollar weakening to around 110.80 yen, but that big swings in currencies would be problematic.
