December 23, 2019 / 5:04 PM / a month ago

GLOBAL MARKETS-Shares inch to new highs on trade hopes, dollar little changed

* MSCI world stock gauge, U.S. shares reach record highs

* Oil trades mixed as Russia touts easing of OPEC+ output

By Herbert Lash

NEW YORK, Dec 23 (Reuters) - Equity markets extended a year-end rally on Monday, with a global index of stocks’ performance and Wall Street hitting new highs, lifted by optimism over U.S.-China trade and growth prospects.

The dollar was little changed after China’s finance ministry said it will lower tariffs on products ranging from frozen pork and avocado to certain semiconductors next year as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

China will implement temporary import tariffs, which are lower than the most-favored-nation tariffs, on more than 850 products, an increase from 706 products that were taxed at temporary rates in 2019, the ministry said.

MSCI’s gauge of stocks across the globe gained 0.12%, reaching a new record, while its emerging market index rose 0.29%.

MSCI’s all-country world index has risen nearly 3% this month as U.S.-China trade tensions eased and confidence grew that Britain would avoid a chaotic exit from the European Union. The index is up 23% in 2019, set for its best year since 2009.

Shares in Europe traded near break-even, with the pan-European STOXX 600 index down 0.02%.

The market remains focused on the trade war, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“It’s a rally being based upon momentum buying now. Stocks are being marked up, and it will continue right up until year end,” he said.

President Donald Trump on Saturday said the United States and China would “very shortly” sign their so-called Phase 1 trade pact.

The benchmark S&P 500 and Nasdaq composite set intra-day highs.

The Dow Jones Industrial Average rose 112.88 points, or 0.4%, to 28,567.97, the S&P 500 gained 5.27 points, or 0.16%, to 3,226.49 and the Nasdaq Composite added 30.51 points, or 0.34%, to 8,955.46.

The Dow was lifted by a 4% gain in shares of Boeing Co after the planemaker fired Chief Executive Dennis Muilenburg over intense scrutiny and industrial setbacks sparked by twin fatal crashes of its 737 MAX jetliner.

The dollar held near a two-week high against a basket of currencies, while sterling fell on concerns over the British government’s hard line on Brexit talks.

The dollar, which benefits when the U.S. economy outperforms others, as well as during bouts of risk aversion due to its safe-haven status, has been supported since Washington and Beijing came to an interim trade agreement earlier this month.

The dollar index is up 1.6% for the year.

On Monday the dollar index rose 0.01% 0.01%, with the euro up 0.09% to $1.1088. The Japanese yen strengthened 0.03% versus the greenback at 109.41 per dollar.

U.S. Treasury yields were little changed to slightly lower in generally thin trading as markets headed into the end of 2019.

New orders for U.S.-made capital goods barely rose in November and shipments fell, suggesting business investment will probably remain a drag on economic growth in the fourth quarter. .

Details of the Commerce Department report were not as soft as the headline suggested, analysts said, lifting yields off their lows.

Benchmark 10-year U.S. Treasury notes last fell 2/32 in price to yield 1.9241%.

Euro zone bond yields were broadly flat on Monday as investors chose safe-haven government debt in thin pre-holiday trade. Germany’s benchmark 10-year Bund was little changed at -0.24%, about 6 basis points below last week’s high.

Oil prices fell as Russia said an OPEC-led producer group may consider easing output cuts next year, offsetting support from some investor optimism that an initial U.S.-China trade deal would be signed soon and boost demand.

Brent crude was down 6 cents at $66.08 a barrel in thin trading. West Texas Intermediate rose 4 cents to $60.48 a barrel.

Reporting by Herbert Lash, additional reporting by Manas Mishra in Bengaluru; Editing by Dan Grebler

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