Fashion forward as stocks hit fresh highs
World stocks hit fresh highs on Wednesday with European markets joining the party as early indications suggest 2018 will be another year of synchronised global growth led by a robust European economy.
After its biggest one-day gain in more than two weeks on Tuesday, and in the wake of its best year since 2009 in 2017, MSCI's index of global stocks, which tracks shares in 47 countries, pushed on to new record highs. The pan-European stock index was 0.2pc higher following gains in Asia and the US. In Dublin the Iseq was up at 7,063.94 by late afternoon.
The euro was holding near a four-month high of $1.2081 hit on Tuesday.
"Investors have woken up in the new year and looked forward to another firm year for global growth with very muted downside risk," said Investec economist Philip Shaw. But he warned against reading too much into the first two trading days of the new year.
"The converse is the sell-off in bond markets: the idea that inflation pressures may be firmer than expected and central banks could take a slightly more aggressive approach than previously thought," Shaw added.
ECB rate-setter Ewald Nowotny told a German newspaper that the European Central Bank may end its stimulus programme this year if the euro-zone economy continues to grow strongly.
In London, Retailers stole the spotlight among UK stocks on Wednesday after Next delivered a strong Christmas update, as the FTSE 100 edged down from record highs.
Britain's main stock index dipped 0.1pc, weighed down by financials stocks and consumer staples.
Next shone, however, jumping 8pc to the top of the index after its trading update surprised investors, with a sales beat driving the company to upgrade its full-year profit forecast.
Cheery results from the first UK retailer to report on the crucial Christmas season caused a rally in retail stocks across the market, delivering relief to investors in a sector faced with significant challenges.
Next's update was in stark contrast to the start of 2017 when the retailer issued a profit warning and its shares sank. The main non-food retailers drove the market, with Marks & Spencer up 2pc and Primark owner ABF gained 2.6pc. EU regulatory reforms under the MiFID II market directive that came into force on Wednesday had little early impact on the market, traders said.