(Adds close of U.S. markets)
* U.S. stocks, MSCI's global equity gauge hit record highs
* STOXX 600 index in Europe hits record high
* Oil prices, Treasury yields move higher on trade prospects
By Herbert Lash
NEW YORK, Dec 16 (Reuters) - Global stock markets rallied on
Monday, pushing Wall Street's three major indexes and a global
gauge of equity performance to record highs after a preliminary
U.S.-China trade deal pointed to stronger world growth, helping
to lift oil prices.
The pan-European STOXX 600 index .STOXX also hit a record
high and the landslide election victory last week by British
Prime Minister Boris Johnson drove the benchmark FTSE 100
.FTSE to its biggest single-day gain in almost a year.
Chinese stocks rose to a six-week closing high as investors
cheered the trade deal and growth in China's industrial and
retail sectors beat expectations in November. China remained cautious ahead of signing the agreement after
months of at-times testy negotiations.
Gold held steady and the dollar eased as investors sought
clarity on the deal's fine print.
"It's good news but we can't celebrate yet," said Mark
Mobius, founding partner of Mobius Capital Partners and former
executive chairman of the Templeton Emerging Markets Group.
Mobius has spent four decades scouring emerging markets for
investments.
The "phase one" deal will double U.S. exports to China and
has been "absolutely completed," Larry Kudlow, director of the
National Economic Council, told Fox News Channel. The deal suspended a threatened round of U.S. tariffs on
$156 billion of Chinese exports that was scheduled to take
effect on Sunday. The United States also agreed to halve the
tariff rate, to 7.5%, on $120 billion worth of Chinese goods.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.70% and the pan-European STOXX 600 index .STOXX rose
1.39 to hit record highs.
The three major U.S. stock indices posted record closing
highs. The Dow Jones Industrial Average .DJI rose 100.51
points, or 0.36%, to 28,235.89. The S&P 500 .SPX gained 22.65
points, or 0.71%, to 3,191.45 and the Nasdaq Composite .IXIC
added 79.35 points, or 0.91%, to 8,814.23. Apple Inc AAPL.O , among the biggest companies to benefit
from the deal, rose 1.71%. Chipmakers .SOX that make the
components for its iPhones also gained, up 0.96%.
For much of 2019, investors have fretted over fears of a
global recession, in good part driven by the prolonged
U.S.-China trade dispute, said Candice Bangsund, a portfolio
manager of global asset allocation at Fiera Capital in Montreal.
Equities are poised for further upside because of receding
trade headwinds and reflationary efforts by the Federal Reserve,
the European Central Bank and the Bank of Japan, she said.
"From a 'what's priced-in standpoint,' it's reduced
uncertainty. What's not priced in, though, is the impact it's
going to have on the global economy," Bangsund said.
Britain's FTSE 100 .FTSE surged 2.25% in the largest
single-day gain since late December 2018, while the mid-cap FTSE
250 .FTMC index jumped 1.9% to hit an all-time high.
Domestically focused stocks benefited from the British
election euphoria, with banking heavyweights Lloyds LLOY.L ,
Barclays BARC.L and RBS RBS.L jumping between 3.7% and 5.5%.
Oil prices edged higher on hopes energy demand will increase
because of the U.S.-China trade deal, but prices remained below
Friday's three-month highs. Brent crude oil futures LCOc1 settled up 12 cents to
$65.34 a barrel, while West Texas Intermediate crude CLc1
gained 14 cents to settle at $60.21 a barrel.
Caution over the future path of trade talks weighed on the
dollar. The dollar index .DXY fell 0.12%, with the euro EUR= up
0.21% to $1.1142. The Japanese yen JPY= weakened 0.24% versus
the greenback at 109.60 per dollar.
U.S. Treasury yields rose as traders took an optimistic view
of the preliminary U.S.-China trade deal and its impact on
growth. Benchmark 10-year notes US10YT=RR fell 16/32 in price to
yield 1.8766%.
U.S. gold futures GCcv1 settled mostly unchanged at
$1,480.50 an ounce.
GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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