GLOBAL MARKETS-World shares hit fresh peaks on dovish Fed bets

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* MSCI World up after hitting record high for 7 days

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* European stocks fall, Nikkei outperforms on stimulus hopes

* Euro up ahead of ECB meeting on Thursday

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* Aussie slips even as RBA proceeds with taping

MILAN, Sep 7 (Businesshala) – World stocks hit fresh record highs on Tuesday on rising bets that the US Federal Reserve will push back to reduce its bond purchases and maintain its broad policy for the near term.

European shares fell in early trade after Monday’s gains, with the STOXX 600 regional index down 0.1% but still nearing its lifetime peak in August.

The MSCI World Equity Index was up 0.1% by 0.746 GMT and looked set to post its eighth consecutive day of gains, while stock futures pointed to a positive opening on Wall Street after the long Labor Day weekend.

“Now that the Fed’s announcement of tapering in September seems unlikely, we should expect the ‘Goldilocks’ markets to continue through at least October or November,” said Masahiko Lu, portfolio manager at AllianceBernstein.

The latest rally, which began after Fed Chair Jerome Powell’s sluggish speech at a Jackson Hole symposium in August, was further boosted by a surprisingly soft US payrolls report on Friday.

The US economy created 235,000 jobs in August, the lowest in seven months as hiring halted in the leisure and hospitality sectors, stoking hopes that the Fed would opt for an early tapering of its monthly bond purchases.

Japanese stocks rose on hopes that the ruling Liberal Democratic Party would offer additional economic stimulus and easily win the upcoming general election after unpopular Prime Minister Yoshihide Suga stepped down.

Tokyo’s Nikkei climbed 0.9%, also helped by its reshuffle announcement, and the broader Topix index climbed 1.1% to a 31-year high.

Mainland Chinese shares extended gains, with the Shanghai Composite rising 1.5% to its highest level since February, with Chinese trade data helping both exports and imports grow faster than expected in August.

“The mood is improving on the expectation that the government will take steps to support the economy and the monetary environment will be kept conducive,” said Wang Shenshen, senior strategist at Mizuho Securities.

In currency markets, the euro rose 0.1% to $1.188, slightly below Friday’s one-month peak, but well supported ahead of Thursday’s European Central Bank policy meeting.

The ECB can be seen debating a cut in stimulus with the expectation of purchases under the ECB’s Epidemic Emergency Purchase Program (PEPP) being reduced from the current 80 billion euros to 60 billion euros per month.

ING strategist Chris Turner said Friday’s soft US jobs report and comments made by Powell last month took “some bites out of the dollar’s upside”.

“Even the unrecoverable euro has found some friends in recent weeks as the hawks on the ECB demand a re-evaluation of pandemic support levels,” he added.

The Australian dollar rose briefly after the central bank went ahead with its planned tapering of bond purchases, but quickly gave up on those gains after the bank reiterated the need to watch for persistently high inflation to raise interest rates. Gave.

The Aussie was last 0.1% lower at $0.7431 from its 1-1/2-month high set on Friday.

Oil prices were mixed after Saudi Arabia’s sharp cut in crude oil contract prices for Asia resumed concerns over the demand outlook.

Brent crude futures rose 0.2% to $72.4 a barrel, while US crude futures fell 0.5% to $68.9.

Reporting by Danilo Masoni in Milan and Hideyuki Sano in Tokyo


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