* World stocks index hits record hit, Europe fades
* U.S. dollar bounce runs out of steam on profit taking
* Technical indicators ask questions about valuations
* Data remains strong
By Marc Jones
LONDON, Feb 16 World stocks hit an all time high
on Thursday as the latest round of robust global data matched
hopes that major economies like the United States will soon be
serving up large helpings of fiscal stimulus.
MSCI's All Country World index, which spans
46 countries, notched the milestone as Wall Street hit its
latest record and Asia and Europe
consolidated the roughly 10 percent gains both have made since
There were surges in exports from Indonesia and Taiwan,
falls in unemployment in Europe from Sweden to the Netherlands
while stronger U.S. retail sales and inflation data on Wednesday
came as Donald Trump again promised mass tax cuts.
"With the exception of politics, I have rarely seen such as
network of positive signals," said ABN Amro's chief investment
officer Didier Duret.
"There is a momentum, we don't know when it will stop, but
at the moment it is strong," he said. "Investors are rather
underinvested anyway and there is lots of cash so equities are
the asset class of default in this environment."
Another reason for the upbeat mood has been that, unlike in
recent years, the prospect of U.S. interest rate rises - which
tend to set the bar for global borrowing costs - does not seem
to be spooking markets.
The dollar is still down for the year despite a
strong run over the last couple of weeks, while Treasury yields
, have barely risen, which has helped propel emerging
market bonds, stocks and many currencies higher.
The dollar hit the brakes again on Thursday as the glow of
the previous day's upbeat data faded. U.S. government bond
yields eased too, taking German Bunds
and Europe's other benchmarks with them.
Upcoming elections in the Netherlands, France, Germany and
possibly Italy, have kept investors interested in "safe"
government bonds particularly with anti-euro and anti-EU
sentiment on the increase throughout the continent.
Markets will also get a better idea later of how much of an
impact the recent rebound in euro zone inflation has had on the
thinking at the European Central Bank when it publishes the
minutes of its January meeting.
"The ECB minutes should provide more minutes on the extent
of any hawkish dissent (to its stimulus programme)," Mizuho
analysts said in a note.
In commodity markets, which have also been enjoying a strong
year so far, oil prices recovered from a knock from data showing
record high U.S. crude and gasoline inventories.
Brent and U.S. crude both inched up 0.3
percent to $55.92 and $53.28 a barrel respectively, while gold
prices also rose as the dollar drifted down.
Industrial bellwether copper, which has surged 30 percent
since late October, eased however to $6,028 a tonne
after China's overseas investment weakened. China is the world's
top copper user, but prices were supported by the prospect of
supply disruptions in Chile and Indonesia.
The mildly weaker metals prices meant European shares
couldn't quite hold their ground either despite the sentiment
boost from the new record high in global stocks.
The region's STOXX 600 index was 0.3 percent lower
by 1000 GMT but this year's rally has been underpinned by the
fact European company earnings are expected to grow 14 percent
this year, according to Thomson Reuters I/B/E/S data.
Asia had no such problems overnight. MSCI's main Asia index
rose 0.2 percent to its highest since July 2015
after Wall Street had again pushed relentlessly into record-high
Some investors said markets were looking slightly overvalued
from a technical perspective after the bounce in recent weeks.
For example, on a relative strength index (RSI), the MSCI
Asia-ex Japan index was at its most overbought since 2015.
"We are seeing some profit-taking at these levels and unless
there is a big correction, the broader uptrend in the Hong Kong
market seems broadly intact," said Alex Wong, Hong Kong-based
director of Ample Finance Group.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Reporting by Marc Jones; Editing by Tom Heneghan)