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GLOBAL MARKETS-Feel good factor keeps world stocks near record highs, oil jumps

Published 20/01/2020, 10:04
© Reuters.  GLOBAL MARKETS-Feel good factor keeps world stocks near record highs, oil jumps
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* Global shares hold near record highs

* European stocks dip, U.S. markets shut for holiday

* Oil prices climb on Libyan supply concerns

* Week packed with cbank meetings, earnings, Davos

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Dhara Ranasinghe

LONDON, Jan 20 (Reuters) - World stocks held near record

highs on Monday as generally better data and earnings bolstered

sentiment, while oil prices hit their highest in over a week

after two large crude production bases in Libya began shutting

down following a blockade.

European equities opened a touch lower .FTSE .GDAXI

.STOXX , while U.S. stock futures were down marginally.

Trading was light with U.S. markets closed for the Martin

Luther King Jr. holiday. Still, the week was expected to bring

plenty of direction given central bank meetings, earnings,

closely-watched business activity data and the annual meeting of

the World Economic Forum in Davos.

While investors took some money off the table on Monday,

sentiment was supported by signs that the economic outlook has

improved, aided by an easing of trade tensions between the

United States and China - the world's two biggest economies.

"The feel-good factor appears to be driven by a number of

factors including better than expected economic data, as well as

the dialling back of trade tensions between the U.S. and China

as the low-hanging fruit of a phase one trade deal was being

signed off," said Michael Hewson, chief market analyst at CMC

Markets.

"If you also toss into the mix some better than expected

earnings reports from U.S. banks and other multinationals, it

makes a heady cocktail of optimism on which to push stock

markets higher."

MSCI's s all-country index .MIWD00000PUS is up almost 2.5%

for the first three weeks of the year and was holding near

record highs on Monday along with Wall Street and European

benchmark equity indices.

Just three weeks into the new year, the S&P 500 .SPX has

gained just over 3% and the NASDAQ .IXIC almost 5%.

In Asia, MSCI's broadest index of Asia-Pacific shares

outside Japan .MIAPJ0000PUS was flat having risen to its

highest since June 2018. Japan's Nikkei .N225 added 0.2% to be

near its highest in 15 months.

Chinese shares stayed strong with the blue-chip CSI300 index

.CSI300 rising 0.7%, while China's yuan hit a new six-month

high CNY= .

U.S. corporate earnings this week include Netflix NFLX.O ,

Intel Corp INTC.O and Texas Instruments TXN.O , while the

European Central Bank, Bank of Canada and Bank of Japan hold

policy meetings.

"In 2020 we don't expect the pace of growth to slow as much

as it did last year," said Mark Haefele, chief investment

officer at UBS Global Wealth Management.

"Accommodative policy and the reduction of downside risk

following the signing of the Phase 1 U.S.-China trade deal will

help support the economy and risk assets."

OIL JUMP

Oil prices rose to their highest in more than a week after

two large crude production bases in Libya began shutting down

after forces loyal to commander Khalifa Haftar closed a

pipeline. O/R

Brent crude LCOc1 futures rose almost 1% to $65.49 a

barrel, while U.S. crude CLc1 jumped 0.8% to $59.02.

In currency markets, a string of mostly solid U.S. data

helped underpin the dollar.

Figures on Friday showed U.S. homebuilding surged to a

13-year high in December and a gauge of manufacturing activity

rebounded to its highest in eight months. The dollar last traded at around 110.17 yen JPY=EBS , not

far off an eight-month peak of 110.305 last week.

The euro was stuck at $1.1093 EUR= , while sterling was

roughly a quarter of a percent weaker against the euro and

dollar GBP=D3 EURGBP=D3 . A string of poor British economic

news has fanned speculation about a cut in interest rates soon,

weighing on sterling. Elsewhere, gold was a tad firmer at around $1,560 per ounce

XAU= , having hit a seven-year high earlier this month at the

height of Iran-U.S. tensions.

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