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GLOBAL MARKETS-World stocks hit new high as Spanish relief, tech rally boost European trading
October 30, 2017 / 9:55 AM / a month ago

GLOBAL MARKETS-World stocks hit new high as Spanish relief, tech rally boost European trading

* iPhone suppliers jump on Apple pre-orders

* Euro zone stocks near 10-year highs (reut.rs/2gUuA0L)

* Spanish markets climb on Catalonia relief

* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh

* Graphic: Catalonia crisis dents Spanish valuations tmsnrt.rs/2yXsTqc

By Helen Reid

LONDON, Oct 30 (Reuters) - World stocks hit a new record high on Monday, boosted by strong global technology stocks, while European trading was lifted by a recovery in Spanish markets after a poll eased investors’ concerns over Catalan secession.

MSCI’s world equity index, which tracks shares in 47 countries, rose 0.2 percent to its highest ever level. The index has surged 17.7 percent so far in 2017, and is on track for its best annual showing since 2013.

Euro zone stocks climbed 0.2 percent, holding near their highest level in 10 years. European stocks have surged this year as a healthy economy dovetailed with convincing growth in corporate earnings and a reduction in political risk.

“There is an avalanche of things that are happening or going to happen, but markets are just shrugging it off. It’s like markets have been vaccinated against bad news thanks to the strength of the global business cycle,” said Marie Owens Thomsen, global head of economic research at Indosuez Wealth Management in Geneva.

Spanish stocks jumped 1.4 percent and government borrowing costs fell after a weekend survey suggested Catalan secessionists may lose their majority in regional elections scheduled for December.

Spain’s benchmark 10-year bond yield fell 2 basis points to 1.52 percent. Banks Caixabank and Sabadell, which moved their headquarters out of Catalonia due to the crisis, led gains on the IBEX.

The broader market showed signs of relief, with euro zone banks rising 0.9 percent, and Italian stocks - which have been sensitive to the Spanish crisis - up 0.5 percent. Germany’s 10-year bond yield also fell.

Technology stocks also drove European trading, riding a wave of gains on Nasdaq and in Asia after Apple said pre-orders for its new iPhone X were “off the charts”.

iPhone component suppliers AMS, Dialog Semiconductor and STMicro led gains.

Europe’s tech sector has quietly boomed this year, and is outperforming the Nasdaq in the year so far.

Spanish relief also helped the euro recover from its three-month low to trade up 0.2 percent at $1.1635.

The ECB’s decision last week to extend bond purchases into September 2018 had sent the euro sharply lower.

CENTRAL BANKS IN THE SPOTLIGHT

In a week of policy meetings by three major central banks, gold edged down on investor caution.

The Bank of England is widely expected to raise rates on Thursday to row back on its post-Brexit vote monetary easing, but investors feared that the decision could create more volatility than the well-received ECB stimulus extension last week.

“This coming week will see whether the BoE has also managed to steer markets in the right direction,” said Societe Generale analysts in a note.

Major currencies kept to tight ranges as interest rate decisions by the Bank of Japan and the U.S. Federal Reserve were also awaited.

The dollar was 0.3 percent softer against a basket of currencies as investors focused on the impending appointment of the next Federal Reserve chair, with speculation rife that Fed governor Jerome Powell is the favoured candidate.

An announcement is expected this week.

Sterling rose 0.2 percent against the dollar.

Oil markets firmed and Europe’s energy stocks rose on expectations that an OPEC-led production cut due to expire next March would be extended.

Brent crude futures were up 0.6 percent, at a more than two-year high, while U.S. West Texas Intermediate (WTI) crude futures rose 0.1 percent. Europe’s oil and gas stocks rose 0.6 percent, among top gainers.

In other commodities, copper traded up 0.2 percent

A surge in tech stocks helped MSCI’s broadest index of Asia-Pacific shares outside Japan gain 0.4 percent overnight.

Japan’s Nikkei ended little changed but remained around its highest level since mid-1996. Chinese shares bucked the trend, with the Shanghai Composite Index posting its worst day in 10 weeks.

Apple results on Thursday could offer the next big catalyst for tech stocks’ seemingly unstoppable rise.

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

Additional Reporting by Sujata Rao

Our Standards:The Thomson Reuters Trust Principles.
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