HomeNewsWorld stocks hit near 2-1/2 year high

World stocks hit near 2-1/2 year high

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World stocks hit their highest in nearly 2-1⁄2 years on Wednesday and the dollar dipped to eight-week troughs as strong fourth-quarter corporate earnings boosted confidence the world economic recovery would keep its momentum.

Apple Inc released strong results and an upbeat outlook on dazzling sales of the iPhone and iPad, while International Business Machines Corp reported better than expected quarterly profit.

Good results from ASML are also likely to boost the outlook for the tech sector after the Dutch firm reported an eight-fold rise in profit yesterday.

“With further support coming after the US close as both Apple and IBM served up stronger than expected results, the bulls may well retain the upper hand on the basis that IT suppliers can be seen as a good barometer of the economy as a whole,” said Ben Potter, market strategist at IG Markets.

The MSCI world equity index rose 4% to its highest level since August 2008. The Thomson Reuters global stock index also rose 4%.

The FTSEurofirst 300 index was up slightly on the day while emerging stocks gained 6%.

According to Thomson Reuters data, 61% of S&P 500 companies that have reported earnings beat expectations. Earnings growth among S&P 500 companies is expected at 32,2% in the fourth quarter.

US crude oil rose 4% to $91,75 a barrel, helped in part by a weaker dollar and concerns over disruptions in North Sea crude supplies.

The dollar fell to an eight-week low against a basket of major currencies while continued short-covering helped push the euro higher, gaining half a percent to $1,3452.

Bund futures rose 24 ticks. Investors were eyeing a two-year bond sale by Germany due later in the day.

Germany’s offering was expected to draw healthy demand with two-year yields at their highest in over a year after the European Central Bank (ECB) shifted market expectations on interest rates forward with a warning on inflation last week.

“The (ECB president Jean-Claude) Trichet-induced back-up in short-end yields to briefly above 1,20% for the Schatz may well induce buyers,” Commerzbank analyst Rainer Guntermann said in a note to clients.

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