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GLOBAL MARKETS-Feel good factor keeps world stocks near record highs, oil jumps

Published 01/20/2020, 05:04 PM
Updated 01/20/2020, 05:08 PM
© Reuters.  GLOBAL MARKETS-Feel good factor keeps world stocks near record highs, oil jumps
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* Global shares hold near record highs
* European stocks dip, U.S. markets shut for holiday
* Oil prices climb on Libyan supply concerns
* Week packed with cbank meetings, earnings, Davos
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Dhara Ranasinghe
LONDON, Jan 20 (Reuters) - World stocks held near record
highs on Monday as generally better data and earnings bolstered
sentiment, while oil prices hit their highest in over a week
after two large crude production bases in Libya began shutting
down following a blockade.
European equities opened a touch lower .FTSE .GDAXI
.STOXX , while U.S. stock futures were down marginally.
Trading was light with U.S. markets closed for the Martin
Luther King Jr. holiday. Still, the week was expected to bring
plenty of direction given central bank meetings, earnings,
closely-watched business activity data and the annual meeting of
the World Economic Forum in Davos.
While investors took some money off the table on Monday,
sentiment was supported by signs that the economic outlook has
improved, aided by an easing of trade tensions between the
United States and China - the world's two biggest economies.
"The feel-good factor appears to be driven by a number of
factors including better than expected economic data, as well as
the dialling back of trade tensions between the U.S. and China
as the low-hanging fruit of a phase one trade deal was being
signed off," said Michael Hewson, chief market analyst at CMC
Markets.
"If you also toss into the mix some better than expected
earnings reports from U.S. banks and other multinationals, it
makes a heady cocktail of optimism on which to push stock
markets higher."
MSCI's s all-country index .MIWD00000PUS is up almost 2.5%
for the first three weeks of the year and was holding near
record highs on Monday along with Wall Street and European
benchmark equity indices.
Just three weeks into the new year, the S&P 500 .SPX has
gained just over 3% and the NASDAQ .IXIC almost 5%.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS was flat having risen to its
highest since June 2018. Japan's Nikkei .N225 added 0.2% to be
near its highest in 15 months.
Chinese shares stayed strong with the blue-chip CSI300 index
.CSI300 rising 0.7%, while China's yuan hit a new six-month
high CNY= .
U.S. corporate earnings this week include Netflix NFLX.O ,
Intel Corp INTC.O and Texas Instruments TXN.O , while the
European Central Bank, Bank of Canada and Bank of Japan hold
policy meetings.
"In 2020 we don't expect the pace of growth to slow as much
as it did last year," said Mark Haefele, chief investment
officer at UBS Global Wealth Management.
"Accommodative policy and the reduction of downside risk
following the signing of the Phase 1 U.S.-China trade deal will
help support the economy and risk assets."

OIL JUMP
Oil prices rose to their highest in more than a week after
two large crude production bases in Libya began shutting down
after forces loyal to commander Khalifa Haftar closed a
pipeline. O/R
Brent crude LCOc1 futures rose almost 1% to $65.49 a
barrel, while U.S. crude CLc1 jumped 0.8% to $59.02.
In currency markets, a string of mostly solid U.S. data
helped underpin the dollar.
Figures on Friday showed U.S. homebuilding surged to a
13-year high in December and a gauge of manufacturing activity
rebounded to its highest in eight months. The dollar last traded at around 110.17 yen JPY=EBS , not
far off an eight-month peak of 110.305 last week.
The euro was stuck at $1.1093 EUR= , while sterling was
roughly a quarter of a percent weaker against the euro and
dollar GBP=D3 EURGBP=D3 . A string of poor British economic
news has fanned speculation about a cut in interest rates soon,
weighing on sterling. Elsewhere, gold was a tad firmer at around $1,560 per ounce
XAU= , having hit a seven-year high earlier this month at the
height of Iran-U.S. tensions.

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