(Fixes day of the week)
* World stocks on track for 24% gain in 2019
* Trump announces signing of trade deal in mid-January
* Dollar slides as investors buy up trade-sensitive
currencies
* China December manufacturing activity beats expectations
By Herbert Lash
NEW YORK, Dec 31 (Reuters) - The dollar slid to a six-month
low on Tuesday as progress on U.S.-China trade tensions led
investors to higher-risk assets, while a year-end rally that
pushed global equity markets to record highs petered out on the
last trading day of the year.
U.S. President Donald Trump said the Phase 1 pact with China
would be signed on Jan. 15 at the White House, though confusion
remains about details of the agreement. Stocks for a second day in a row failed to rise on the trade
news as they have for most of December on hopes of an imminent
deal, a key factor for lifting a gauge of global equities to
their best year since 2009, with a gain of almost 24%.
MSCI's all-country world index .MIWD00000PUS of equity
performance in 49 nations, fell 0.5 points or 0.09 percent, to
563.88.
The breakthrough in U.S.-China trade talks and a British
election pointing to a smoother exit from the European Union
boosted investor sentiment recently but the outlook for equities
next year is not as buoyant, said David Kelly, chief global
strategist at JPMorgan Asset Management.
"Going forward it's going to be very hard to achieve the
same gains that we've achieved, or anything like them," Kelly
said. "The U.S. stock market rally could continue but at some
stage there's going to be a significant correction, and the more
it goes up the more it's going to correct."
On Wall Street, the Dow Jones Industrial Average .DJI fell
48.62 points, or 0.17 percent, to 28,413.52. The S&P 500 .SPX
lost 5.06 points, or 0.16 percent, to 3,216.23 and the Nasdaq
Composite .IXIC dropped 6.84 points, or 0.08 percent, to
8,939.15. In a shortened trading sessions ahead of New Year's Eve
celebrations, the pan-European STOXX 600 index .STOXX closed
down 0.1%. French .FCHI , British .FTSE and Spanish .IBEX listed
stocks lost between 0.1% and 0.7%, while Frankfurt .GDAXI and
Milan .FTMIB bourses were shut for the year-end holidays.
Bourses in Asia also diverged. China mainland stocks
.CSI300 .SSEC gained 0.4% after data showed manufacturing
activity in the world's second-largest economy expanded for a
second straight month in December. In Hong Kong, stocks .HSI fell 0.5% as protesters geared
up for pro-democracy rallies on New Year's Eve. Markets in Japan and South Korea were closed for a holiday.
The dollar slid, coming close to wiping out the year's
gains, as the pound and a clutch of trade-sensitive currencies
rallied on improving U.S.-China trade relations and the outlook
for global growth. The dollar also fell as one of the biggest bets in the FX
market for 2020 is shorting the U.S. currency.
"We could be right at a turning point where global growth
re-accelerates relative to U.S. growth, and that could mean a
weaker dollar over time," Kelly said.
The dollar was strong for much of 2019 thanks to the
relative outperformance of the U.S. economy and investors'
preference for a safe-haven currency amid the trade dispute. But
the dollar's gains for the year shrivelled in December.
Investors bought up currencies linked to global trade,
sending the Australian dollar, Chinese yuan and Scandinavian
crowns to multi-month or multi-week highs against the greenback.
The dollar index .DXY , which tracks a basket of six
currencies, fell 0.27 points or 0.28 percent, to 96.47.
The euro EUR= was last up 0.19 percent, at $1.1218.
The weak dollar helped lift spot gold XAU= to its highest
since Sept. 25 at $1,525.20 an ounce. The metal was set to post
its biggest yearly gain since 2010, rising more than 18%.
Oil fell on the last trading day of the year, but was still
on track for monthly and annual gains, supported by a thaw in
the prolonged U.S.-China trade row and Middle East unrest.
Brent crude LCOc1 fell 37 cents to $66.30 a barrel, while
U.S. West Texas Intermediate (WTI) crude CLc1 slid 29 cents to
$61.39 a barrel.
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Asian shares over the past decade https://tmsnrt.rs/2tdGbh8
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