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GLOBAL MARKETS-Global shares hit record high on COVID recovery bet

Published 16/02/2021, 10:08 pm
© Reuters
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* German economic sentiment jumps

* Bitcoin eases off record high

* Sterling eyes $1.40

* Copper hits 8-year high on recovery hopes

* U.S. futures gain 0.5%

* World FX rates http://tmsnrt.rs/2egbfVh

By Huw Jones

LONDON, Feb 16 (Reuters) - Global shares hit record highs on Tuesday and were on track for their longest winning streak in 17 years as investors bet the rollout of COVID-19 vaccines would lead to a durable economic recovery and draw a line under a year of lockdowns.

The MSCI's global stock index .MIWD00000PUS was up 0.16% at 686.19 points after hitting a record high of 686.38 points earlier in the session. A positive close would mark the 12th consecutive day of gains for the first time since January 2004.

The pan-European STOXX 600 .STOXX was up 0.19%, after hitting its highest since late February 2020.

"The big picture is that there is an awful lot of enthusiasm for recovery when it comes to the vaccine programme," said Michael Hewson, chief market analyst CMC Markets.

The ZEW investor sentiment index in Germany, Europe's biggest economy, rose by far more than expected in February on expectations that people will flock back to shops and other retail outlets in the coming six months. for recovery lit up commodities, with copper CMCU3 at $8,384.50, after hitting its highest since May 2012, and platinum scaling a 6-1/2 year peak. The European mining index .SXPP was at its highest level since July 2011.

Hospitality stocks could see more gains as restaurants, hotels and pubs reopen in coming weeks. They should do well on the back of the "staycation" trade, Hewson said.

Recovery hopes in Britain sent sterling GBP=D3 to 2-1/2 year highs, just short of $1.40 against the dollar.

Oil prices jumped to a 13-month high as a deep freeze due to a severe snow storm in the United States not only boosted power demand but also threatened oil production in Texas.

Bitcoin was trading at $49,061.90 BTC=BTSP in Europe, after hitting a new record high $60 shy of $50,000 earlier in the day.

The euro EUR=EBS crept 0.3% higher to $1.21590.

S&P500 futures ESc1 were up 0.5%, signalling gains to come on Wall Street as well. U.S. 10-year Treasury yields US10YT=RR were trading at 1.24%.

The U.S. dollar =USD index, at 90.184, was mired at a three-week low as growing optimism about recovery sent investors into riskier currencies, including the euro and British pound.

U.S. President Joe Biden is pushing ahead with his plan to pump an extra $1.9 trillion in stimulus into the economy, in a further boost to market sentiment.

NIKKEI RALLY

Market sentiment in Europe was helped by gains overnight in Asian shares, with Japan's Nikkei blue chip index .N225 up 1.28% at a 30-year high.

In Hong Kong, the Hang Seng Index .HSI rose 1.9% to hit a 32-month high, while Australia's S&P/ASX200 .ASXJO gained 0.7%. Mainland Chinese markets will remain closed for holidays until Thursday.

Ord Minnett adviser John Milroy said that while share markets were positive, investors were becoming wary of the future risk of inflation due to central bank and government stimulus programmes in place around the world.

"There is a clear sense with rates staying low for some time yet and investor appetite for equities staying strong we will likely see markets hold up for some time yet," Milroy told Reuters.

Investors are looking to the minutes from the U.S. Federal Reserve's January meeting, due to be published on Wednesday, for confirmation of its commitment to maintain its dovish policy stance over the near future. That in turn is set to keep a lid on bond yields.

Brent crude LCOc1 was flat at $63.28 a barrel, after rising to its highest since January 2020 in the previous session. U.S. West Texas Intermediate (WTI) crude CLc1 futures gained 60 cents, or 0.7%, to $59.89 a barrel.

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