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European stocks were firmly on the rise for the second consecutive session Tuesday amid a renewed equity market rally that has taken shares in Asia to their highest levels in a decade and boosted global stocks to a new all-time high.
The Stoxx Europe 600 index, the broadest measure of regional share prices, was marked 0.37% higher in the opening hour of trading to trade at a one-month high of 380.84 points. Benchmarks around the region were also on the rise and getting a boost from a softer euro, as well, with the single currency slipping below the 1.20 mark against the U.S. dollar amid a modest rebound for the greenback and some cautious words on low inflation levels in the region from European Central Bank Executive Board member Benoit Coeure on Monday.
Germany’s DAX performance index was trading 0.5% higher at just over 12,530 points by 10:00am Frankfurt time while Switzerland’s SMI was seen 0.7% higher thanks to solid gains for financial sector shares.
Britain’s FTSE 100 added 0.35% from last night’s close in the opening hour, but gains were mitigated by the recent rise in the pound, which traded at 1.3202 against the U.S. dollar ahead of August inflation figures from the Office for National Statistics and repeated warnings from the Bank of England about overall low-rate complacency.
Overnight in Asia, the dollar index, which measures the currency’s strength against a basket of its global peers, gained 0.1% to a near one-week high of 91.94 as investors unwound so-called safe-haven bets and puts cash into riskier portions of the financial markets.
The dollar gains held down local currencies and boosted the attraction of domestic stocks to foreign buyers, helping the MSCI Asia ex-Japan index gain 0.2% to a 2007 higher before paring that advance into the start of the European session. A softer yen also fulled another strong session in Japan, where the Nikkei 225 closed at 19,776.62 points after a 1.18% gain.
Prior to the start of the Asia session, the MSCI All Country World Index, which tracks around 2,400 stocks in 47 countries, traded at an all-time high thanks in part to record-setting gains in the United States.
A combination of cooling tensions between North Korea and its regional neighbours and overall investor relief that the human and economic damage from Hurricane Irma looks to be significantly smaller than anticipated added to market optimism on Wall Street Monday and extended through the Asia session.
Regional allies and global investors were also cheered by a U.N. Security Council agreement to step-up the level of sanctions on Pyongyang following a series of provocative missile and weapons tests. The sanctions include a limit on incoming fuel supplies and a ban on the country’s textile exports.
Global oils prices, however, slipped modestly in overnight trading at the start of the European session thanks in part to the stronger U.S. dollar and the steady return of U.S. refining capacity in the Gulf region to full speed in the wake of Hurricane Harvey.
West Texas Intermediate crude futures for October delivery were seen 0.16% lower at $47.96 each while Brent contracts for November, which is the broader benchmark for global prices, were marked 0.2% lower at $53.70.
Early indications from Wall Street futures suggest another solid start for U.S. benchmarks at the opening bell, with the Dow Jones Industrial Average expected to add around 0.2% from yesterday’s 22,057.44 points close and the S&P 500 is for now looking at adding 3 points to its Monday record closing price of 2,488.11.
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