Global Markets World shares near 5-yr high on growth optimism

Business & Markets 2013
Written by Reuters
Tuesday, 07 May 2013 15:59
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LONDON (May 7): World shares hit their highest level in almost five
years on Tuesday as last week's strong U.S. jobs report continued to
fuel optimism about the health of the global economy.
Japanese stocks jumped in a delayed reaction to the data because
Tokyo had been closed for a public holiday on Monday.
The head of the European Central Bank added to the positive mood by
saying it was ready to cut rates again if needed.
Australia's central bank also did its bit to help the economy, cutting rates
to a record low on Tuesday and signalling it could do more, helping
shares.
"I think the markets are going to continue going higher, the S&P hit
another record high yesterday, the DAX is getting closer," said Neil Marsh, strategist at Newedge.
"From a very low base, everyone is fairly optimistic that things are going to improve and if they don't, you've got the added
backdrop from (ECB President Mario) Draghi that he'll do whatever it takes to push the euro zone economy forwards."
The Nikkei stock average soared 3.7 percent and the MSCI global index, which tracks stocks in 45 countries, rose 0.3
percent, both the highest since June 2008.
European equities also nudged up as trading gathered momentum, bolstered by a crop of better than expected corporate
earnings and with the German DAX index closing in on its own record high of 8,151,57 set back in 2007.
Monday's comments from Draghi that the ECB would cut rates again if needed, including pushing its key deposit rate into
negative territory, kept downward pressure on the euro as it hovered little changed on the day at $1.3075.
The prospect of negative euro zone rates continued to underpin the bloc's bond markets too with the benchmark German
Bund a tick lower on the day at 146.15.
The main focus for Asian currency markets was the Reserve Bank of Australia's policy meeting, at which the bank decided to
lower its cash rate by 25 basis points to a record low 2.75 percent.
Markets had priced in a 50-50 chance of a rate cut, and the decision sent the Australian dollar down to a two-month low of
$1.0810 and helped Australian shares trim earlier losses.
Investors are now waiting for a batch of April data from China, the world's second-largest economy, for more clues on global
growth.
Chinese trade data will be released on Wednesday, inflation on Thursday and money supply and loan growth expected from
Friday. - Reuters