* Euro STOXX 600 up 0.3%
* MSCI ex-Japan Asia hits record
* Nasdaq futures up on Netflix
* Investors bullish after Yellen supports big spending
* Oil up, dollar on the back foot
By Tom Wilson and Hideyuki Sano
LONDON/TOKYO, Jan 20 (Reuters) - World shares gained on
Wednesday on expectations of hefty U.S. spending after U.S.
Treasury Secretary nominee Janet Yellen urged lawmakers to "act
big" to save the economy and worry about debt later. Oil rose
and the dollar slipped in response.
At her confirmation hearing on Tuesday, Yellen said the
benefits of a big stimulus package to counter the coronavirus
pandemic were greater than the expenses of a higher debt burden.
Pandemic relief would take priority over tax increases, she
said, calling for corporations and the wealthy - both winners
from Republican tax cuts in 2017 - to "pay their fair share".
European rebounded, with the Euro STOXX 600 .STOXX
climbing 0.4%. Indexes in Frankfurt .GDAXI and Paris .FCHI
were both up a similar amount, though London shares .FTSE were
flat.
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 0.8% .MIAPJ0000PUS to
its highest ever. Hong Kong's Hang Seng .HSI gained 1% to near
its 2019 peak. Australian shares hit a record high .AXJO .
U.S. President-elect Joe Biden, who will be 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.
"They realised 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."
The MSCI world equity index .MIWD00000PUS , which tracks
shares in almost 50 countries, was last up 0.1%.
On Wall Street, Nasdaq futures NQc1 gained 0.6%, as
Netflix NFLX.O jumped 12% after the close on strong growth in
subscribers and projections it will no longer need to raise
debt. S&P 500 futures were also up 0.2%.
Biden will take office on Wednesday under unprecedented
security measures after the Jan. 6 assault on the Capitol.
DEFENSIVE DOLLAR
The dollar slipped from a one-month high after Yellen's
comments. Against a basket of currencies =USD ,
it was last down 0.1% at 90.285, having climbed 1.2% from a
three-year nadir hit two weeks ago.
Safe-haven gold jumped 0.8% to $1,855 per ounce XAU= .
The euro stood at $1.2145 EUR=EBS , up 0.1% and off
Monday's month-and-a-half low. It drew support from an investor
sentiment survey that beat forecasts and the Italian
government's surviving a confidence vote.
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. U.S. crude futures added 0.8% to $53.39 a barrel CLc1 .
International benchmark Brent futures LCOc1 rose 0.7% to
$56.31 per barrel.
"The continued acceleration of nominal income growth will
ensure a continued sharp recovery in activity which will serve
as a further tailwind for cyclical parts of the market, in
particular materials and energy," said Brendan Mulhern,
strategist for the BNY Mellon Global Real Return Strategy at
Newton Investment Management.
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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
Down on the dollar https://tmsnrt.rs/2M0wFaq
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