TOKYO/LONDON :World stocks gained on Thursday after a record rise for U.S. shares overnight, and U.S. Treasuries remained under pressure as investors processed a second Donald Trump presidency, ahead of policy decisions from the Fed and other major central banks.
Europe’s broad STOXX 600 index was last up 0.5 per cent after Asian shares had gained earlier in the day, with even onshore Chinese blue chips rising 3 per cent as investor optimism over potential stimulus outweighed concerns about worsening trade tensions. [.SS] [.EU]
U.S. stock futures pointed higher after all three major Wall Street indexes surged to all-time peaks on Wednesday on the possibility of a Republican sweep that could quickly usher in big fiscal spending. [.N]
Stocks are “rewarding the presumed likelihood of corporate tax cuts and perceiving a general penchant toward deregulation across industries as positive for earnings,” said Naomi Fink, chief global strategist at Nikko Asset Management.
“On the other hand, bond markets have responded unfavourably, with yields rising on the prospect of a united front between executive and legislative arms of government with respect to fiscal expansion.”
“This comes at a time when US debt-to-GDP is already at historic highs near 120 per cent and budget deficits already exceed 6 per cent of GDP,” she said.
The benchmark 10 year yield was last 4.42 per cent, flat on the day, after a 13 basis point rise Wednesday, and the 30-year yield was last 4.61 per cent, a touch higher after the previous day’s 15 bp jump. [US/]
That helped lift the dollar to its biggest one-day gain in more than two years on Wednesday, although the currency eased back slightly on Thursday, and was down 0.3 per cent against a basket of its peers.
The euro was up 0.3 per cent at $1.0762, after Wednesday’s 1.8 per
