December 21, 2014
Global stocks rise on Ukraine diplomacy
World share markets rose today, supported by hopes that diplomatic efforts would cool the crisis in Ukraine, while the euro advanced to its highest level of the year after the European Central Bank signaled the euro zone needs no additional stimulus.
The latest developments in Ukraine, while still worrisome, have not caused investors to back away from stocks and risky investments on a global scale, as occurred on Monday.MSCI's world equity index, which tracks shares in 45 countries, was up 0.5 percent, and the MSCI emerging market index rose 1.1 percent. Standard & Poor's 500 index hit a record high, propelled partly by a bigger-than-expected drop in US weekly jobless claims.
European central bankers offset the geopolitical worries when, as expected, they left interest rates unchanged but offered no signal the ECB will implement unconventional measures such as bond purchases to avert the threat of excessively low inflation and underpin a fragile recovery.
The Bank of England, also meeting today, kept interest rates unchanged, seeking to give the economy more time to build momentum before removing stimulus.
The ECB's show of restraint on monetary stimulus bolstered the euro, boosting it to $1.3871, the highest since late December, according to Reuters data. It was at $1.3856 in late U.S. trading, up 0.9 percent from Wednesday.
The common currency bought 142.76 yen, up 1.6 percent from late on Wednesday but still below the high of 145.09 set on January 1.
European stocks were also supported by the ECB's decision. The FTSEurofirst 300 index tracking Europe's top shares ended little changed at 1,344.56.On Wall Street, the Dow Jones industrial average rose 61.71 points or 0.38 percent, to 16,421.89, the S&P 500 gained 3.22 points or 0.17 percent, to 1,877.03 and the Nasdaq Composite dropped 5.848 points or 0.13 percent, to 4,352.125.
The S&P 500 reached an intraday record high of 1,881.94.
Earlier, Tokyo's Nikkei closed up 1.6 percent.
Russian shares were a notable exception, falling nearly 1 percent, while the rouble weakened 0.3 percent against the US dollar at 36.138 roubles.
Due to the resilience in stock prices, investors further pared their holdings in less-risky US and German government bonds. The yield on US 10-year Treasuries rose 4 basis points to 2.73 percent, while the yield on 10-year Bunds gained 5 basis points to 1.65 percent.
In the oil market, crude prices rose in a late bout of technical buying from earlier losses tied to reduced fears of war in Ukraine. Brent crude settled up 34 cents, or 0.32 percent, at $108.10 a barrel. US crude settled up 11 cents, or 0.11 percent, at $101.56.
Gold traded in a tight range with investors awaiting cues from Friday's US jobs data and developments in Ukraine. It rose $13.2, or 0.99 percent, to $1,350.21 an ounce.