GLOBAL MARKETS-Bumper year for stocks and commodities, downer for the dollar

From Reuters - December 28, 2017

SYDNEY (Reuters) - Asian markets were ending 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from taking away the punch bowl.

MSCIs broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was consolidating three straight weeks of gains that left it near decade peaks. The index has been on an upward trajectory for pretty much all of 2017 and is up 33 percent on the year so far.

Hong Kong .HSI led the charge with gains of 36 percent for the year, while South Korea .KS11 notched up 22 percent and India .BSESN 27 percent.

Japan's Nikkei .N225 and the S&P 500 are both ahead by almost 20 percent, while the Dow has risen by a quarter. In Europe, the German DAX has gained nearly 14 percent, though the UK FTSE has lagged a little with a rise of 7 percent.

Craig James, chief economist at fund manager CommSec, said of the 73 bourses it tracks globally, all but nine have recorded gains in local currency terms this year.

For the outlook, the key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines, said James.

Globalisation and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are.

The Dow .DJI ended Thursday with a rise of 0.26 percent, while the S&P 500 .SPX gained 0.18 percent and the Nasdaq Composite .IXIC 0.16 percent.

Tech stocks .SPLRCT were the best-performing sector in 2017, with gains of more than 37 percent.


No nearly so fortunate have been U.S. dollar bulls. The widely held assumption at the start of the year was that, with the Federal Reserve set to raise interest rates further, the only way for the dollar was up.


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