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Global stocks at new high, oil reaches peak since 2015


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Market bulls resumed their charge on Thursday, as strong data from the world’s biggest economies sent stock index records tumbling and oil prices to their highest since mid-2015.
In an apparent acceleration of last year’s global equity boom, MSCI’s world index and London’s FTSE both set records in Europe, and Dow Jones broke the 25,000-barrier when Wall Street reopens.
Tokyo’s Nikkei had earlier shot to its highest since 1991 with a 3.3% surge. Asia-Pacific, excluding Japan, scaled a decade-high peak as a fifth day of gains in China helped emerging market stocks to a sixand-a-half-year high as well.”It is a continuation of the goldilocks story,” said Michael Metcalfe, State Street Global Markets’ head of macro strategy. “The main theme last year was strong growth and accommodative (monetary) policy, and the data we have had so far suggest that the growth is expected to accelerate, and without inflation.”
The data published on Thursday reinforced expectations that solid world growth will boost demand for goods, including oil, and lift corporate earnings. China’s services sector activity hit its highest level in more than three years, manufacturing data from Japan came in strong and euro zone surveys showed the bloc enjoying its strongest run in nearly seven years.
Oil prices were touching levels not seen since before commodity markets slumped in 2014 and 2015, boosted by tensions in key producer Iran and ongoing OPEC-led output cuts. US West Texas Intermediate (WTI) crude futures rose as high as $62 per barrel, their highest level since mid-2015 before easing back. International benchmark Brent rose to a 2 1/2-year high of $68 a barrel.
“Oil appears to be traded at a premium compared to economic fundamentals because of concerns over development in Iran,” said Motofumi Okoshi, senior economist at Nomura Securities.
Another factor behind the upbeat mood was that minutes of the Federal Reserve’s mid-December meeting released on Wednesday did little to change that view that it will stick to measured increases in US interest rates.

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