Shares and dollar rise on more signs of economic recovery

Wed Jan 8, 2014 8:25am EST
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By Sudip Kar-Gupta

LONDON (Reuters) - Global equities and the dollar rose on Wednesday, as solid German economic data pointed to a pick-up in world trade and kept European shares near five-and-a-half year highs.

News on Tuesday that the U.S. trade deficit hit a four-year low also bolstered optimism over the global economy and lifted the dollar. Meanwhile, a bumper Irish debt sale confidence that peripheral euro zone countries were on the mend.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 countries, edged up 0.1 percent on Wednesday to reach its highest level in five-and-a-half years. Japan's Nikkei .N225 jumped 1.9 percent to approach a six-year peak.

Data showing that exports from Europe's biggest economy, Germany, rose for a fourth straight month in November provided fresh evidence that the euro zone economy and world trade are recovering from the 2008 financial crisis.

Further signs came from strong demand on Tuesday for Ireland's first debt sale since it exited an international bailout program. Spanish and Irish government bond yields hovered near multi-year lows on Wednesday, with Spanish yields reaching four-year lows.

The pan-European FTSEurofirst 300 index .FTEU3 was flat, trading near its highest level since mid-2008. Futures on the U.S. stock markets, which have hit record highs, edged back by 0.1 percent.

Shares in Asia excluding Japan rose, and the MSCI Emerging Markets index .MSCIEF was up by 0.4 percent.

Norman Boersma, a chief investment officer at Franklin Templeton's Templeton Global Equity Group, said that while there was still a degree of uncertainty over the economic outlook, equities remained an attractive place to put money.   Continued...

People walk past an electronic information board at the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth