MSCI’s broadest index of world stocks, on Thursday, October 12, reached record highs as it has done for six of the last eight trading days .
“Fundamentally, the global economy is in decent shape. Corporate sentiment is also sound as evidenced by strong data like the Chinese PMI, U.S. ISM and Japanese tankan. All these factors are leading to the rise in global stocks,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“Financial markets will remain wary of geopolitical headlines. But barring actual military conflicts, negative responses by equities are expected to be short-lived.”
European stocks were less bouyant, with financial shares being the biggest burden and Just Eat the top performer after its merger with Hungryhouse got provisional clearance.
Asian stocks reached a 10-year high on Thursday, riding the bull run in global equity markets, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.
Spreadbetters expected a mixed start for European stocks, forecasting Britain’s FTSE to open down 0.05 percent, Germany’s DAX to start 0.03 percent higher France’s CAC to open flat.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.55 percent and at its highest since December 2007.
Japan’s Nikkei was up 0.4 percent after brushing 20,994.40, its highest since November 1996. South Korea’s KOSPI added 0.55 percent to mark a fresh record peak and Hong Kong’s Hang Seng scaled a decade-high.
Asia took cues from Wall Street, where major indexes rose to yet another set of record closing highs overnight following a report that a market-friendly candidate was being pushed as successor to Janet Yellen at the helm of the Fed.
Broader investor risk sentiment has improved this week after Catalonia dialed back plans to break away from Spain, with MSCI’s 47-country world stocks index reaching a record high.
Global equities now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride, to reach those record tops.
