LONDON: Global shares rose for the 11th day in a row to reach a fresh peak on optimism about the rollout of COVID-19 vaccines and new fiscal aid from Washington, while tensions in the Middle East drove oil to a 13-month high.
As more people are vaccinated across key markets such as the United States, and with U.S. President Joe Biden looking to pump an extra $1.9 trillion in stimulus into the economy, the so-called reflation trade has gathered steam in recent days. On Friday, the Cboe Volatility Index, known as Wall Street’s “fear gauge”, ended at its lowest level for nearly a year, helping to drive a 0.4% gain for MSCI’s broadest measure of world stocks on Monday.
Taking its cue from a stronger, albeit holiday-thinned, Asian session, Europe’s major indexes were a sea of green in early deals, with Britain’s FTSE 100 up 2.2%. With China and Hong Kong markets closed for the Lunar New Year holiday, Japan’s Nikkei led the way, climbing 1.9% to reclaim the 30,000-point level for the first time in more than three decades.
E-mini futures for the S&P 500 were also higher, up 0.5%, although U.S. stock markets are closed on Monday for the Presidents Day holiday.
Later in the week, all eyes will be on the release of minutes from the U.S. Federal Reserve’s January meeting, where policymakers decided to leave rates unchanged, for hints about the likely direction of monetary policy. Those concerned about the impact of market exuberance on the outlook for inflation will also have fresh data to parse, with Britain, Canada and Japan all due to report. Friday will also see major economies, including the United States, release preliminary February purchasing managers’ indexes (PMI). “We believe investors should prepare for bouts of volatility ahead, but regard them as opportunities rather than threats,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. – Agencies
