(Updates through close of U.S. trading)
By David Randall
NEW YORK, Jan 19 (Reuters) - Global equity benchmarks rose
to new record highs and oil prices rose on Wednesday as
investors moved into riskier assets in anticipation of further
U.S. stimulus under the new Biden administration to mend the
economic damage of the coronavirus pandemic.
U.S. President Joe Biden, who was sworn into office on
Wednesday, last week laid out a $1.9 trillion stimulus package
proposal to boost the economy and speed up the distribution of
vaccines.
U.S. Treasury Secretary nominee Janet Yellen urged lawmakers
to "act big" to save the economy and worry about debt later at a
confirmation hearing Tuesday. Pandemic relief would take priority over tax increases, she
said, while calling for corporations and the wealthy - both
winners from Republican tax cuts in 2017 - to "pay their fair
share".
Investors in European equities welcomed the comments, with
the Euro STOXX 600 .STOXX climbing 0.7.% Luxury stocks gave
the biggest boost, with Richemont CFR.S quarterly sales
climbing 5%, led by strong growth at its jewellery brands in
Asia and the Middle East. The buoyant mood mirrored that in Asia, where MSCI's
Asia-Pacific index outside Japan rose 1% .MIAPJ0000PUS to its
highest ever. Hong Kong's Hang Seng .HSI gained 1.1% to near
its 2019 peak. Australian shares hit a record high .AXJO .
"They realized that there is some limits to what monetary
policy can do to effect change in the real economy," said
Shaniel Ramjee, senior investment manager at Pictet Asset
Management. "The Fed will continue buying bonds issued by the
U.S. Treasury in order to fund the fiscal programs."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.13%, hitting a new record. The index is up 3.5% since
the start of January.
On Wall Street, the Dow Jones Industrial Average .DJI rose
257.86 points, or 0.83%, to 31,188.38, the S&P 500 .SPX gained
52.94 points, or 1.39%, to 3,851.85 and the Nasdaq Composite
.IXIC added 260.07 points, or 1.97%, to 13,457.25.
The jump in risk assets came as the United States officially
passed 400,000 deaths from the coronavirus since the pandemic
began. The U.S. death toll last week topped 23,000, setting a
new record for the third week in a row.
China, meanwhile, said that it is facing its worst outbreak
of the virus since March 2020.
The dollar index =USD rose 0.04%, with the euro EUR=
down 0.17% to $1.2107.
Positioning data showed investors are overwhelmingly short
on the dollar, betting budget and current account deficits will
weigh on the greenback.
Benchmark 10-year notes US10YT=RR rose 4/32 in price to
yield 1.0802%, from 1.092% late on Tuesday.
Spot gold XAU= added 1.2% to $1,861.86 an ounce.
Italy's benchmark borrowing costs dropped to their lowest in
over a week on Wednesday after Prime Minister Giuseppe Conte
narrowly managed to stay in office - albeit now heading a
minority government. Italian 10-year bond yields dropped to their lowest since
Jan. 11 - before Conte lost his majority - at 0.533%, down 2
basis points on the day. Oil prices rose on hopes that Biden's proposed stimulus will
lift economic output. Brent LCOc1 settled at $56.08 per barrel, up 0.3%, while
U.S. crude CLc1 rose 0.5% to end at $53.24.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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