Wall St rally resumes before 2019 close
The US dollar has slid to a six-month low as progress on US-China trade tensions led investors to higher-risk assets, while a year-end rally that lifted global equity markets to record highs stayed alive on the last trading day of 2019.
A gauge of world stock markets and stocks on Wall Street rebounded late in Tuesday's session after trading lower most of the day, marking an end to a remarkable year for investors. Many equity indices, long-term bonds, oil and gold posted double-digit gains in 2019.
US President Donald Trump said the Phase 1 trade pact with China would be signed on January 15 at the White House, though confusion remains about details of the agreement.
Hope of an imminent deal has been a key driver for lifting global equities to their best year since 2009, up 24 per cent for the year and 88 per cent for the decade.
MSCI's all-country world index of stock performance in 49 nations rose 0.86 point or 0.15 per cent, to 565.24. The index is less than three points shy of an all-time high set on Friday, when the three major US indices also posted record peaks.
The breakthrough in US-China trade talks and a British election earlier in December pointing to a smoother exit from the European Union have boosted investor sentiment, but the outlook for equities next year is not as buoyant, said David Kelly, chief global strategist at JPMorgan Asset Management.
"This is a year in which everybody will celebrate," he said.
Going forward, however, Kelly said it will be hard to achieve similar gains, with US equities likely to advance by mid-single digits annually for several years. International markets, especially emerging markets, are poised to do better, he said.
"The US stock market rally could continue but at some stage there's going to be a significant correction, and the more it goes up, the more it's going to correct," he said.
In shortened trading sessions ahead of New Year's Eve celebrations, the pan-European STOXX 600 index closed down 0.08 per cent.
French, British and Spanish listed stocks lost between 0.1 per cent and 0.7 per cent, while Frankfurt and Milan bourses were shut for the year-end holidays.
On Wall Street, the Dow Jones Industrial Average rose 76.3 points, or 0.27 per cent, to 28,538.44 and the S&P 500 gained 9.49 points, or 0.29 per cent, to 3,230.78 The Nasdaq Composite added 26.61 points, or 0.3 per cent, to 8,972.60.
Emerging market stocks lost 0.34 per cent.
Bourses in Asia diverged. China mainland stocks gained 0.4 per cent after data showed manufacturing activity in the world's second-largest economy expanded for a second straight month in December.
In Hong Kong, stocks fell 0.5 per cent as protesters geared up for pro-democracy rallies on New Year's Eve.
Markets in Japan and South Korea were closed for a holiday.
The dollar's slide came close to wiping out the year's gains, as the pound and trade-sensitive currencies rallied on improving US-China trade relations and the outlook for global growth.
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