World stocks took a good break near the highest record on Wednesday, as a forecast of the International Monetary Fund (IMF) of the most robust global growth since the 1970s this year and the unshakable bond and the FX markets kept the risk appetite buoyant.
While the increasing number of global coronavirus cases and geopolitical tensions between China and Taiwan and between Russia and Ukraine ensure it was by means a fairy tale, the market certainly felt Goldilocks again. STOXX 600 of Europe perched just below the first record that it had reached more than a year on Tuesday. MSCI’s fifty countries World Index was grinding the sixth day of the increase, and Wall Street futures also pointed higher.
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There is little sign that the benchmarks of government results that drive global loan costs were preparing to shoot higher in the bond market. The dollar was sitting quietly low at a two-week low. The IMF raised its global growth estimate to 6% this year from 5.5% on Tuesday, reflecting a bright US economic prospect and post-pandemic recovery.
Meanwhile, experts suggest that if realized, the global economy would be growing at the highest since 1976, although after the steepest annual decline from the post-war era last year when the coronavirus pandemic outbreak halted the global trade. “Even with high uncertainty about this pandemic, the way out of the health economic crisis is increasingly visible,” said IMF’s economist Gita Gopinath.
Overnight, the MSCI Asia-Pacific stock index had begun at a firm footing, going as high as 208.46 points; the last level was seen on March 18. However, it gives up on selling pressure and ends evenly like China’s CSI300 Blue-Chip index dipped 1%, and Hong Kong eased 0.9%.
Geopolitical tensions in this region added to the anxiety. Taiwan’s foreign minister said on Wednesday it would fight to the end if China attacked, adding that the United States saw the danger that this could occur during increasing Chinese military pressure, including aircraft carrier exercises, near the island. Other Asian markets managed to remain positive. Japanese Nikkei closed higher; Australian shares rose 0.6%, and South Korea Kospi added 0.3%.
Wall Street Futures pointed to a 0.1% increase for the S&P 500, Dow Jones Industrial, and Nasdaq. The S&P 500 and Dow had reached the record level on Monday, driven by a more robust job report than expected last Friday, and data are showing a dramatic rebound in America’s service industry figures.
The upcoming income season is expected to show the S&P profit growth of 24.2% from the previous year, according to Refinitiv data, and investors will be watching to see if other corporate results confirm positive economic data. All eyes will also be on minutes of the US Federal Reserve’s March policy meeting when they are published later.
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