* MSCI’s all-country world index at all-time high
* Global equity markets boosted by China stimulus
* China manufacturing data adds to optimism
* Dollar recovers from six-month low
* Crude prices edge higher at start of 2020
By Herbert Lash
NEW YORK, Jan 2 (Reuters) - The dollar snapped a four-day losing streak on Thursday and global stock markets jumped at the start of 2020 as a shot of Chinese stimulus drove a gauge of world equity performance to a record high.
Gold climbed to a three-month peak while yields on U.S. Treasuries and Germany’s 10-year bond tumbled on optimism about the world economy after positive Chinese manufacturing data took an edge off fixed income’s safe-haven status.
News that China’s central bank was freeing another 800 billion yuan ($115 billion) to prop up a slowing economy added to the outlook for economic growth, which has been fueled by easing U.S.-Sino trade tensions.
China’s factory activity expanded at a slower clip in December, pulling back from a three-year high the previous month as new orders softened, but production continued to grow at a solid pace and business confidence shot up.
The Caixin/Markit Manufacturing Purchasing Managers’ Index for December eased to 51.5 from 51.8 in November, but it remained above the 50-mark that separates expansion from contraction for the fifth straight month.
In another piece of positive data, the number of Americans filing claims for jobless benefits edged lower last week, a positive for the U.S. labor market with recent signs new claims may be trending slightly higher.
“It still feels like this continuation of the surge that happened toward year-end in 2019,” said Ken Polcari, senior market strategist at SlateStone Wealth LLC in Jupiter, Florida.
“You did have some good Chinese data that came out overnight, a positive manufacturing PMI, which is very expansionary and helping fuel the rally.”
MSCI’s gauge of stocks across the globe gained 3.14 points, or 0.56%, to set an all-time high, while the pan-European STOXX 600 index rose 0.93%.
The double dose of Chinese news helped Europe’s main markets in London, Frankfurt and Paris jump 0.82% to 1.06%, outpacing overnight gains in Asia and setting them on course for their best opening day of a year since 2013.
On Wall Street, the Dow Jones Industrial Average rose 238.87 points, or 0.84%, to 28,777.31. The S&P 500 gained 17.98 points, or 0.56%, to 3,248.76 and the Nasdaq Composite added 95.24 points, or 1.06%, to 9,067.85.
Emerging market stocks rose 1.17%, as the Bovespa index in Brazil advanced 2.2% to an all-time high. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.9% higher.
China’s blue-chip CSI300 index, one of the world’s best performers last year, rose 1.4%, reaching its highest since Feb. 7, 2018. Hong Kong’s Hang Seng added 1.25%.
Alibaba Group Holding Ltd rose 3.4% on news that China’s Ant Financial, an affiliate of the e-commerce giant, has joined the race for a digital banking license in Singapore, the company said in a statement.
Gold prices were boosted by doubts about the lasting strength of Wall Street’s stock rally, said Jeffrey Christian, managing partner of CPM Group.
“There is nervousness about why the stock markets are as high as they are, given the economical and political environment,” Christian said.
U.S. gold futures settled 0.3% higher at $1,528.10 an ounce. Spot gold hit a three-month high of $1,531.20.
The dollar recovered from a six-month low after a downbeat December left an index that tracks the greenback versus a basket of six major trading currencies almost flat at the end of 2019.
The dollar index rose 0.45%, with the euro down 0.37% to $1.1168. The Japanese yen strengthened 0.17% versus the greenback at 108.52 per dollar.
Sterling was on track for its biggest daily loss in two weeks as euphoria after last month’s UK election gave way to anxiety over the risk of a no-deal Brexit at the end of 2020.
The pound was last trading at $1.3138, down 0.88% on the day.
Benchmark 10-year U.S. Treasury notes rose 10/32 in price to yield 1.8754%.
Germany’s 10-year bond yield briefly hit -0.16% on optimism better U.S.-China trade relations will spur global growth, denting safe-haven assets.
The yield on the bund, a benchmark for European lending, soon slid to -0.23%.
Oil prices steadied after early gains as signs of improving U.S.-China trade relations eased demand concerns and rising tensions in the Middle East provided support.
Brent crude futures settled up 25 cents at $66.25 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 12 cents to settle at $61.18 a barrel.
Reporting by Herbert Lash; Editing by Dan Grebler