GLOBAL MARKETS-Stocks resume ascent on earnings hopes, euro gets lift from ECB

From Reuters - January 11, 2018

TOKYO (Reuters) - Asian stocks resumed their ascent on Friday, supported by U.S. earnings optimism and a rise in oil prices while the euro edged higher as the European Central Bank signalled an end to its massive stimulus.

MSCIs broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, following two straight sessions of decline. Japans Nikkei dipped 0.1 percent.

Wall Streets three major stock indexes hit record highs with earnings for S&P 500 companies expected to have increased by 11.8 percent in the recently-ended quarter, according to Thomson Reuters I/B/E/S.

MSCIs broadest gauge of the worlds stock markets also hit a record high on Thursday, having risen in seven of the eight business days so far this year for a total increase of 3.3 percent.

The energy sector led the gains as oil prices rose to three-year highs while interest rate sensitive-sectors, such as utilities and real estate companies, underperformed.

U.S. Treasury yields fell on Thursday after China disputed a media report that its government officials had recommended the country slow or halt its purchases of U.S. bonds.

Chinas currency regulator dismissed the report but said it is diversifying its foreign exchange reserves in order to safeguard their value.

The 10-year Treasuries yield stood at 2.550 percent, off Wednesdays ten-month high of 2.597 percent.

On the other hand, the benchmark German 10-year Bunds yield hit a five-month high of 0.532 percent after accounts of the ECBs December meeting showed it thinks it should revisit its communication stance in early 2018.

With the euro zone seeing its best growth in a decade, the ECB should gradually shift its stance to avoid a more disruptive move later and look at a broader revision of its policy guidance to reduce the focus on bond purchases and raise the emphasis on interest rates, they showed.


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