World stocks hit fresh record highs as investors around the world look for risk
World stock markets have risen to fresh all-time record highs as investors around the globe anticipate economic growth after a sustained period of stagnating economies.
The MSCI all-country world index added further to Wednesday’s record highs with small gains on Asian markets mimicking those in US markets, despite futures suggesting the rally may pause when they open later.
US equity markets led gains on Wednesday as the prospect of higher inflation continued the push into riskier but higher-yielding assets, despite a markedly more hawkish tone from the Federal Reserve.
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The S&P 500, the most watched measure of US stocks by professional investors, closed at a record 2,349.25 points, while the talismanic Dow Jones Industrial Average similarly recorded a new peak close at 20,611.86.
US equities have risen steadily since the election of Donald Trump as President. Investors are eagerly awaiting details of the new administration’s economic plan, although there have been few solid details other than a commitment to roll back the Dodd Frank banking regulations.
Bank shares have been among the best-performing sectors worldwide as a result. Shares of global systemically important banks tracked by the KBW Nasdaq Global Bank Index have risen by around 19 per cent since Trump’s election.
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David Morrison, senior market strategist at Spread Co, said: “Investors are currently bulled up by Donald Trump’s promise of some ‘phenomenal’ news on taxes within the next few weeks. More generally, it feels as if no one wants to risk missing out on further market gains in what could prove to be the most business-friendly US environment for many years.”
Trump addresses the US Congress on 28 February. After the lack of economic plans in the President’s inauguration, investors will be listening closely for details of his promised infrastructure spending.
The strong outlook for the US has been mirrored by European stocks, with the Euro Stoxx 600 rising by more than 12 per cent since its pre-election trough.