Markets remain buoyant as records tumble
- Article by: PAN PYLAS
- Associated Press
- May 8, 2013 - 5:07 AM
LONDON - Markets remained solid Wednesday, a day after a number of records were set as investors continued to pile into stocks following forecast-busting U.S. jobs figures.
A number of the world's major stock indexes are heading toward record levels, or were trading at all-time highs. On Wednesday, Germany's DAX was headed for a peak, following another five-year high on Japan's Nikkei.
On Tuesday, the Dow Jones industrial average closed above 15,000 for the first time ever, driven by optimism that the U.S. economy will keep gaining momentum but not at a pace that will prompt the Federal Reserve to abandon its cheap and easy monetary policy anytime soon.
The euphoria that has gripped markets has been fueled by a number of factors, including last Friday's better than anticipated U.S. nonfarm payrolls report for April, an apparent easing in Europe's debt crisis and an aggressive new monetary policy in Japan.
"We may be entering a period where economic data comes in stronger but without any hint of tightening in terms of monetary policy," said Yusuf Heusen, a sales trader at IG. "For investors nothing could be sweeter, so it will take a fairly substantial chunk of bad news to disrupt the positive narrative."
In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,567 while the CAC-40 in France rose 0.5 percent to 3,940. Germany's DAX appeared headed for another record close, rising 0.2 percent to 8,202.
U.S. shares were poised for a fairly flat opening, with little economic and corporate news due. Dow futures were up 0.1 percent and the broader S&P 500 index were unchanged.
The strength of stocks is a sign of heightened investor appetite for risk. That was also evident in the performance of the euro, which was trading another 0.4 percent higher at $1.3121.
Earlier in Asia, there was good news from China, where the government reported that growth in imports and exports accelerated in April, suggesting that the world's No. 2 economy might be strengthening after an unexpected decline in the first quarter of 2013.
"The latest Chinese trade data points to some degree of resilience in export performance — though some commentators are challenging the veracity of the data," said Neil MacKinnon, global macro strategist at VTB Capital.
In mainland China, the Shanghai Composite Index gained 0.5 percent to 2,246.3, while the smaller Shenzhen Composite Index rose 1.1 percent to 965.41. Hong Kong's Hang Seng added 0.9 percent to 23,244.35.
Elsewhere in Asia, Japan's Nikkei 225 index rose 0.7 percent to 14,285.69, its highest close in almost five years even though the yen once again failed to breach the 100 yen level against the dollar. The dollar was trading 0.1 percent higher at 98.96 yen.
And Australia's S&P/ASX 200 gained 1.1 percent to 5,199.80 a day after an interest rate reduction by the country's central bank while South Korea's Kospi rose 0.1 percent to 1,956.45.
Oil prices were flat ahead of U.S. oil inventory readings. The benchmark New York rate was unchanged at $95.62 a barrel.
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