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GLOBAL MARKETS-Shares inch to new highs on trade hopes; dollar little changed

Published 24/12/2019, 07:01 am
© Reuters.  GLOBAL MARKETS-Shares inch to new highs on trade hopes; dollar little changed
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(Adds oil, gold settlement prices)

* MSCI world stock gauge, U.S. shares reach record highs

* Oil gains as Russia touts easing of OPEC+ output

* Dollar trades little changed

By Herbert Lash

NEW YORK, Dec 23 (Reuters) - The dollar traded little changed while equity markets added to a year-end rally on Monday, with both a gauge of stock performance worldwide and Wall Street hitting new highs amid renewed optimism over U.S.-China trade and growth prospects.

China's finance ministry said it will lower tariffs on products ranging from frozen pork and avocados to certain semiconductors next year as Beijing looks to boost imports amid a slowing economy and a trade war with the United States. will implement temporary import tariffs, which are lower than the most-favored-nation tariffs, on more than 850 products, an increase from 706 products that were taxed at temporary rates in 2019, the ministry said.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.11%, reaching a new record, while its emerging market index rose 0.26%.

MSCI's all-country world index has risen more than 3% in December as U.S.-China trade tensions eased and confidence grew that Britain would avoid a chaotic exit from the European Union. The index is up 23% in 2019, set for its best year in a decade.

The market remains focused on the trade war, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"It's a rally being based upon momentum buying now. Stocks are being marked up, and it will continue right up until year end," he said, referring to the U.S. equity market.

President Donald Trump on Saturday said the United States and China would "very shortly" sign their so-called Phase 1 trade pact. benchmark S&P 500 and Nasdaq composite set intra-day highs.

The Dow Jones Industrial Average .DJI rose 111.21 points, or 0.39%, to 28,566.3, the S&P 500 .SPX gained 4.42 points, or 0.14%, to 3,225.64 and the Nasdaq Composite .IXIC added 26.61 points, or 0.3%, to 8,951.57.

The Dow was lifted by a 2.77% gain in shares of Boeing (NYSE:BA) Co BA.N after the planemaker fired Chief Executive Dennis Muilenburg over intense scrutiny and industrial setbacks sparked by twin fatal crashes of its 737 MAX jetliner. in Europe traded near break-even, with the pan-European STOXX 600 index .STOXX closing down 0.03%.

The blue-chip FTSE 100 index .FTSE in London rose 0.54% to a five-month high and ninth straight gain, its longest winning streak since May 2017.

In France, the CAC 40 index .FCHI gained 0.13% but the trade-sensitive Deutsche Boerse (DE:DB1Gn) DAX .GDAXI fell by the same amount. The index has gained steadily since September as the prospect of a Sino-U.S. trade deal improved.

The dollar held near a two-week high against a basket of currencies, while sterling fell on concerns over the British government's hard line on Brexit talks.

The dollar, which benefits when the U.S. economy outperforms others, as well as during bouts of risk aversion due to its safe-haven status, has been supported since Washington and Beijing came to an interim trade agreement earlier this month.

The dollar index is up 1.6% for the year.

On Monday the index .DXY fell 0.03%, with the euro EUR= up 0.14% to $1.1093. The Japanese yen JPY= strengthened 0.05% versus the greenback at 109.38 per dollar, while Sterling GBP= traded at $1.2932, down 0.54% on the day.

U.S. Treasury yields were little changed to slightly lower in generally thin trading as markets headed into the end of 2019.

New orders for U.S.-made capital goods barely rose in November and shipments fell, suggesting business investment will probably remain a drag on economic growth in the fourth quarter. of the Commerce Department report were not as soft as the headline suggested, analysts said, lifting yields off their lows.

Benchmark 10-year U.S. Treasury notes US10YT=RR last fell 5/32 in price to yield 1.9329%.

Euro zone bond yields were broadly flat on Monday as investors chose safe-haven government debt in thin pre-holiday trade. Germany's benchmark 10-year Bund was little changed at -0.24% DE10YT=RR , about 6 basis points below last week's high.

Oil prices edged higher as Russia said a producer group led by the Organization of the Petroleum Exporting Countries may consider easing output cuts next year, helping cap optimism that the U.S.-China trade deal will be signed soon and spur demand.

Brent crude LCOc1 settled up 25 cents at $66.39 a barrel in thin trading. West Texas Intermediate CLc1 rose 8 cents to settle at $60.52 a barrel.

U.S. gold futures GCcv1 settled 0.5% higher at $1,488.70 an ounce.

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