Global shares hit record highs in festive cheer

World stocks scaled record highs on Friday and oil prices stayed buoyant in a holiday-shortened week, as optimism grew that a U.S.-China trade deal would soon be signed.

Traders returned from their Christmas and Boxing Daybreak to digest comments from Beijing that it was in close contact with Washington about an initial trade agreement. Earlier, U.S. President Donald Trump had talked up a signing ceremony for the recently struck phase-one trade deal.

Global equity markets scaled fresh records in a year-end rally on Friday as upbeat Chinese economic data and optimism a U.S.-Sino trade deal is imminent bolstered global growth prospects, but the dollar weakened as risk appetite increased.

Wall Street opened to new all-time highs and European shares rose to a third day of record peaks this week as various equity markets remained on course for their best year since at least the global financial crisis a decade ago.

Rising to another record high, European shares were on course for their best year since the financial crisis. The pan-European STOXX 600 index was up 0.2%, helped by gains in export-heavy German shares. The benchmark index has reached record highs for three sessions in a row.

The FTSE 100, set for its best run in three years, added 0.4%. Mining companies provided the biggest boost, with Glencore Plc and BHP Group Plc climbing about 2% each.

The positive tone was set in Asia. MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 0.8% to 555.39, a level not seen since mid-2018. It is up 15.5% so far this year. China’s blue-chip CSI300 was down 0.1%, although for the week the index was up 0.1%.

Profits at industrial companies in China in November grew at the fastest pace in eight months, breaking a three-month declining streak, as production and sales quickened. But broad weakness in domestic demand remains a risk for earnings next year, say, analysts.

The rally in global shares contrasts with a plunge late last year when the Sino-U.S. trade war had sapped investor confidence. The worries scuttled capital expenditure plans over much of 2019, but strong employment and signs of an improving global economy suggest that it will change next year.

The U.S. Federal Reserve’s policy easing, economic data that have come in above expectations, and corporate profits have helped lift stocks this year, along with trade-related optimism. Markets are now waiting for January’s fourth-quarter financial results to see whether sentiment among companies has improved.

The U.S. dollar slipped across the board as increased investor appetite for risk sapped the safe-haven appeal of the greenback. MSCI’s gauge of stock performance in 49 countries gained 0.35% while the pan-European STOXX 600 index rose 0.17%, both setting all-time highs.

On Wall Street, the Dow Jones Industrial Average rose 70.6 points, or 0.25%, to 28,691.99. The S&P 500 gained 4.49 points, or 0.14%, to 3,244.4 and the Nasdaq Composite added 4.37 points, or 0.05%, to 9,026.76.

The S&P 500 was just shy of surpassing annual gains of 29.6% in 2013, which would provide the U.S. benchmark its best year since 1997.

The euro rose to a 10-day high. The dollar index fell 0.54%, with the euro up 0.68% to $1.1172. The Japanese yen strengthened 0.13% versus the greenback at 109.51 per dollar.

U.S. gold futures climbed to a seven-week high of $1,518.70 an ounce. Spot gold added 0.1%.

Gold prices eased from a near two-month high hit earlier in the session as investors booked profits amid thin holiday trade. It was still on course for its biggest weekly gain since early August. Spot gold was 0.01% down to $1,510.80 per ounce.

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