Global Stock Rise To Its Highest Level As Pounds Continues To Stumble

REUTERS – An index of global stocks climbed to its highest level in nearly a year on Tuesday while the British pound tumbled on the prospect of easing monetary policy in the country. globa in

The pound fell for the fifth day in a row after a Bank of England policymaker said the central bank will probably have to loosen monetary policy further if the U.K.’s economy worsens. The Bank of England cut interest rates last week for the first time since 2009 in the wake of the country’s vote to leave the European Union.

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought equities for yield, particularly stocks with high dividend payouts.

“The dominant theme in global markets is low interest rates and liquidity and the support it provides for the stock market, for equities globally,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

“Every fearful drop in the global stock market has been met by this lack of alternatives and cheap cost of financing… It’s a ‘risk on’ when the world’s central banks have your back,” Meckler said.

The Dow Jones industrial average .DJI rose 49.54 points, or 0.27 percent, to 18,578.83, the S&P 500 .SPX gained 5.82 points, or 0.27 percent, to 2,186.71 and the Nasdaq Composite .IXIC added 20.89 points, or 0.4 percent, to 5,234.03.The Nasdaq and S&P 500 rose to fresh intraday records.

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The pan-European FTSEurofirst 300 index .FTEU3 gained 0.9 percent, with Germany’s DAX .GDAXI surging 2.2 percent, helped by well-received earnings reports from reinsurer Munich Re (MUVGn.DE) and telecoms group Altice (ATCA.AS).

MSCI’s all-country world index .MIWD00000PUS rose 0.6 percent, and touched its highest level since late August of 2015.

The pound GBP= fell 0.4 percent against the dollar and touched its lowest level in about a month.“The pound is the big story today,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.Against a basket of currencies, the dollar .DXY fell 0.3 percent after four days of gains. The greenback was 0.5 percent weaker against the Japanese yen JPY=.

Oil prices dipped in choppy trade as forecasts for a weekly drop in U.S. crude inventories were countered by worries of a stubborn global petroleum glut.Brent crude LCOc1 fell 0.1 percent to $45.33 a barrel, while U.S. West Texas Intermediate crude CLc1 slipped 0.2 percent to $43.11 a barrel.Longer-dated U.S. Treasury prices edged higher on Tuesday as a weak report on U.S. productivity suggested the economy may not be growing as quickly as anticipated.

 

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Chukwuyem Ogala is a content writer at Edliner. A multifaceted personality with a degree in Economics. He has a strong passion for Rap music and sports. A big fan of the NBA, likes Rafael Nadal and has a crush on Serena Williams. Chuks just strives to be better and wants to be heard globally.

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