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London / AFP
Stocks across the globe forged higher on Tuesday, with Wall Street setting new records as rising metals and oil prices bolstered sentiment in the mining and energy sectors, dealers said.
At the opening bell on Wall Street, the Dow jumped above 19,000 for the first time, extending its post-election rally. London stocks gained 0.9 percent on the eve of a budget update from the British government, while Frankfurt and Paris posted similar gains.
“Equities are positive across the board as European trading closely echoes both the US and Asian sessions that preceded it,” said Henry Croft, research analyst at trading firm Accendo Markets.
All three major US stock indices had closed at records Monday in anticipation of pro-growth policies under President-elect Donald Trump and congressional Republicans.
“The crude oil price rally shows no signs of letting up … while continued optimism that President-elect (Donald) Trump will implement an infrastructure-based fiscal stimulus behemoth is helping metals, and subsequently miners, to also rally,” said Croft. British sentiment was also buoyed by news of smaller-than-expected government borrowing, one day before finance minister Philip Hammond’s budget statement — his first since June’s Brexit referendum.
The government’s public sector net borrowing, excluding bank bailouts, sank by more than expected to £4.8 billion ($5.9 billion, 5.6 billion euros) in October from a year earlier, official data showed.
The news, which came on the back of strong taxation revenues, gave Hammond a boost on the eve of his so-called Autumn statement.
‘Borrow more?’
Nevertheless, the finance chief is expected to hike his borrowing forecasts on Wednesday owing to weaker-than-anticipated economic growth with Brexit looming.
“Today’s borrowing figures are a bit of good news. The question is … whether the chancellor will seek to borrow more,” noted ETX Capital analyst Neil Wilson.
In Asia, markets rose with energy stocks also tracking rising oil prices, while Tokyo hit a fresh 10-month high after an early sell-off prompted by a huge earthquake off the northeast coast.
The quake struck around dawn in the same region as the deadly 2011 tremor, sparking fears of another tragedy. But while it caused some tsunamis they were not as high as five years ago.
The yen strengthened against the dollar after the quake as investors sought out safe-haven assets, but gave up most of the gains as it emerged there was no major damage. Hopes that the OPEC oil cartel and Russia will be able to hammer out an agreement to cut production have lit a fire under crude prices and in turn energy stocks.