Wednesday 20 September 2017

Relief rally send stocks to record high

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

World shares returned to a record high on Monday, led by the US on relief that hurricane Irma looked to be losing strength and that North Korea's anniversary celebrations at the weekend passed without any new missile test.

MSCI All Country World Index, which tracks roughly 2,400 stocks in 47 countries, climbed to its latest peak as Europe's insurers rose more than 2pc on hopes Irma's damage would not prove as costly as feared.

Wall Street's main markets were expected to gain around 0.5pc when they reopen, having lost ground last week as the storm approached.

"The fact the worst-case scenario for Hurricane Irma hasn't happened and that North Korea managed to get though its national day without sticking two fingers up at the rest of the world has helped ratchet the tensions down," said CMC Markets senior analyst Michael Hewson. "So I think we are going to see the S&P and the Dow gap higher on the open."

Japan's Nikkei and South Korea's main index rose, while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4pc.

In Europe borrowing costs nudged up from recent lows on signs the ECB is closer to winding back hefty monetary stimulus.

Although the ECB is expected to take baby steps towards exiting its stimulus scheme, news that policymakers have already discussed policy options has tempered sentiment in bond markets.

Britain's top share index climbed higher on Monday, boosted by gains among insurance stocks and a rise in AstraZeneca's shares after some positive cancer drug news.

In Dublin the Iseq was higher, but remains well off levels seen at the start of the summer.

Reuters

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