World Stocks Higher, Show Optimism for this Year’s Global Growth

World stocks saw fresh highs with European markets showing indications that 2018 will be another year of synchronized global growth.

Tracking shares in 47 countries, the MSCI’s index of world stocks pushed on to new record highs after its biggest 1-day increase in more than 2 weeks on Tuesday.

The pan-European stock index opened 0.3% higher, adding to gains for their Asian and the US counterparts overnight as manufacturing surveys led to a strong start for the European economy.

The Stoxx Europe 600 gained as chemicals and tech stocks rose, and car manufacturers restored losses from Tuesday’s drop. Trading volumes were around 25% lower than the 30-day average.

“Investors have woken up in the new year and looked forward to another firm year for global growth with very muted downside risk,” said Philip Shaw, economist at Investec. However, he warned against reading too much into the first 2 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,” he said.

Across the globe, MSCI’s index of Asia-Pacific shares outside Japan climbed 0.4%. It soared 1.4% on Tuesday in its strongest performance since March.

Furthermore, equity gauges climbed across Asia, though Japanese markets remained close and the Jakarta Composite Index saw a decline. Emerging-market shares also rallied for a second session, and European bond yields are lower, and the euro dropped for the 1st time in 6 days.

In Thailand, the SET main index jumped 0.55%, while the SET50 and MAI indexes also gained more than 0.50% after the morning session started. It was a 24-year top for Thailand.

Australia’s S&P/ASX 200 Index gained 0.2%, and New Zealand’s benchmark gauge rose 0.4%.

A record high for the Philippine stocks as the Philippine Stock Exchange Index led Asia with 1.1% increase, their best day in nearly 2 years.. The Shanghai Composite Index added 0.7%, and the Hang Seng Index rose 0.6%.

Wall Street started the new year as it ended another set of record closing peaks. The Dow climbed 0.42%, and the S&P 500 rose 0.83%.

“The breadth of the recovery is extraordinary,” said Alan Ruskin, macro strategist at Deutsche Bank. He noted that of 31 countries covered, only 3 failed to show growth, while all the largest manufacturing sectors improved.

Meanwhile, spot gold reached its highest at $1,321.33, before edging back to $1,313.81 per ounce.

Brent crude futures were trading flat at $66.57 a barrel, while US crude futures edged higher 7 cents to $60.43 a barrel.

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