* World stocks index climbs 2 points of record
* European markets, Wall Street futures grind higher
* Chinese shares fall on weak industrial profits
* Bonds buoyed by tepid U.S. consumer confidence, Fed hints
* Safe-haven gold heads for worst month in almost three
years
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Marc Jones
LONDON, Nov 27 (Reuters) - World shares made another push
for a record high on Wednesday after U.S. President Donald Trump
said Washington and Beijing were in the final throes of inking
an initial trade deal.
Early European trading was subdued, with MSCI's all-country
world index .MIWD00000PUS now within 0.4%, or 2 points, of its
record high from January 2018.
London, Frankfurt, Paris and Wall Street futures all rose,
.EU .N and though Shanghai struggled after Chinese industrial
company profits shrank, Australian shares reached record highs
and Japan's Nikkei drew support from the growing likelihood of
extra fiscal stimulus.
A senior Japanese ruling party official said on Wednesday he
believed the government was striving to compile a supportive
spending package worth about 10 trillion yen ($92 billion).
"Something will come out of the phase one (Sino-U.S. trade)
talks," said TD Securities Senior Global Strategist James
Rossiter. "Rolling back tariffs to where they were in August,
with the December ones put on hold or cancelled maybe."
But he said the two countries were unlikely to go beyond
that, and China's declining industrial profits underscored the
economic strain exerted by the tensions. In currency markets, the dollar was stronger against
developed and emerging currencies, with dollar/yen holding above
109 and euro/dollar steady at $1.10. FRX/
That was despite softer-than-expected U.S. economic data on
Tuesday, which showed a fourth straight monthly contraction in
consumer confidence and an unexpected drop in new home sales in
October.
Sterling GBP= scuttled sideways as pre-election opinion
polls showed some narrowing of the Conservative lead over
opposition parties, although Prime Minister Boris Johnson is
still favoured gain an overall majority.
The reaction to the polls squeeze has been modest as the
prospect of another hung parliament raises the prospect of some
form of coalition government made up of parties supporting a
second Brexit referendum.
"So far, the market has been relatively complacent when it
comes to the risks ahead," said Thu Lan Nguyen, FX strategist at
Commerzbank. "Yes, the Tories still have the lead, but they're
certainly not gaining."
YouGov will release seat-by-seat predictions of the election
outcome at 2200 GMT. The 'multilevel regression' and
'post-stratification' model accurately predicted the 2017 hung
parliament, so it will be closely watched.
Polling is certainly not infallible though, Thu Lan Nguyen
pointed out. Before the 2016 Brexit referendum, most surveys had
predicted the UK would vote to remain in the European Union.
NO FEAR
Another signal of the rising market confidence was the CBOE
VIX equity volatility index .VIX , the so-called fear gauge,
subsiding to seven-month lows.
It is now less than half the level it was in August, when
U.S.-China talks looked close to collapsing, and a third of last
December's level when stock markets were pulled lower by trade
angst and rising interest rates.
Kay Van-Petersen, global macro strategist at Saxo Capital
Markets in Singapore, said while Sino-U.S. trade headlines may
be driving some tactical, near-term moves in the market, they
were mostly just "noise".
The broader market direction is "about the accommodative Fed
and accommodative monetary policy and the fact that structurally
the meta-trend is still lower in yields and rates," he said.
China had seized on the plunge in borrowing costs to issue
its biggest international bond ever on Tuesday. Some analysts said a renewed fall in U.S. and European bond
yields this week also pointed to more mechanical explanations
beyond trade for rising equity prices.
U.S. Federal Reserve Chair Jerome Powell said on Monday that
monetary policy was "well positioned" to support the strong U.S.
labour market
In emerging markets, traders were watching Brazil's real,
which fell to a record low, below the troughs of the 2015
recession, despite central bank intervention.
Among the main commodities, oil prices edged lower after
reaching their highest since late September on the reassuring
trade headlines. U.S. West Texas Intermediate crude CLc1 was
down 0.21% at $58.29 per barrel. Global benchmark Brent crude
LCOc1 lost 0.11% to $64.20 per barrel.
Safe-haven gold changed hands at $1,458.33 per ounce on the
spot market XAU= , down 0.2% on the day and heading for its
worst month in almost three years after a 3.5% drop. GOL/
Global market asset performance https://tmsnrt.rs/34qb0wz
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