NEW YORK Benchmark U.S. stock indices rose to record highs on Monday, buoyed by the prospect of continued Federal Reserve stimulus, while the dollar slipped and global equity markets climbed, driven by economic reform plans in China.
The Dow and S&P 500 surged past the 16,000 and 1,800 milestones, respectively, but both U.S. indices pared some gains soon after markets opened. Round numbers often act as resistance points for chartists, but clearing them can also provide momentum for investors eager to chase performance.
Chinese shares listed in Hong Kong posted their biggest gain in nearly two years, driving the safe-haven dollar and Japanese yen lower after China announced its most sweeping economic and social reforms in nearly three decades.
The reform plans boosted investor appetite for higher-yielding currencies such as the Australian and New Zealand dollars. The growth-linked currencies outperformed as a flood of global liquidity and promises to keep interest rates low continue to weigh on the low-yielding U.S. dollar and the yen.
"Risk appetite is strong... after details of China's reform prove more dramatic than expected, suggesting a focus on market liberalization and reforms in both the government role and the broader corporate structure," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.
The China Enterprises Index of the top Chinese listings in Hong Kong soared 5.7 percent for its biggest daily gain since December 1, 2011.
Germany's DAX hit intraday and closing record highs as European shares resumed their rally on an improving outlook for the euro zone economy.
MSCI's all-country world stock index rose 0.52 percent, while the pan-European FTSEurofirst 300 index rose 0.51 percent to close at a provisional 1,304.45.
The Dow Jones industrial average was up 47.76 points, or 0.30 percent, at 16,009.46. The Standard & Poor's 500 Index was up 0.99 points, or 0.06 percent, at 1,799.17. The Nasdaq Composite Index was down 2.95 points, or 0.07 percent, at 3,983.02.
Gold fell as a rebound in equities and lackluster physical demand prompted traders to cash in three days' of gains, though expectations the Fed's policy will stay loose lent support.
U.S. Treasury debt prices rose, supported by the prospect of the Fed's continued "easy" monetary policy.
The dollar index, a measure of the greenback against a basket of currencies, slipped 0.2 percent to 80.684.
The euro drew some support after data showed the euro zone's trade surplus grew more than expected in September.
The Australian dollar rose 0.32 percent to US$0.9398, while the New Zealand dollar gained 0.36 percent to US$0.8371.
Brent crude oil fell toward $108 a barrel after a week of sharp gains ahead of talks between Iran and the West that could lead to an increase in Iranian crude oil exports.
January Brent crude was down 17 cents at $108.33 a barrel, while U.S. crude for December delivery rose 4 cents at $93.88.
Trading in the U.S. Treasury market was comparatively subdued, with the benchmark 10-year Treasury note up 9/32, leaving its yield at 2.6729 percent.
Bund futures settled up 23 ticks at 141.85, while 10-year German yields fell to 1.68 percent.
Germany's ZEW business sentiment indicator on Tuesday and the minutes from the Federal Reserve's October policy meeting on Wednesday may provide hints to future monetary policy moves.
(Additional reporting by Marc Jones in London; Editing by Dan Grebler)
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