World stocks, dollar rally on hopes for global growth

Thursday, 16 January 2014 00:00 -     - {{hitsCtrl.values.hits}}

REUTERS: Share markets were mostly higher on Wednesday as the World Bank upgraded its outlook for the global economy, while the dollar extended gains in the wake of surprisingly strong US consumer spending figures. European stocks started with a spring in their step too, as confirmation that Germany saw robust growth last year prompted the biggest rise of the year so far for Frankfurt’s DAX. The German benchmark’s near 1% gain was complimented by smaller but still significant gains on bourses elsewhere in the region, taking the FTSEurofirst 300 index to a fresh 5-1/2 year high. “German consumption turned out to be especially robust last year,” said Dekabank economist Andreas Scheuerle. “With the shackles of the sovereign debt crisis being loosened, this year should lead to considerably stronger growth.” Helping the better mood overall, the World Bank upgraded its forecast for global growth this year by two tenths of a point to 3.2%, and predicted a faster pace for both 2015 and 2016. While the bank trimmed forecasts for some developing nations, including China, growth in emerging markets as a whole was seen accelerating to 5.3% this year. The dollar was also back in vogue. It extended its rally to 104.35 yen, leaving behind Tuesday’s trough of 103.00. It also firmed against the euro, which was last worth $ 1.3611 and was also weaker against the yen at 142.03 yen. The US currency had sprung ahead on Tuesday after retail data soothed worries raised by last week’s disappointing payrolls report. While the headline measure of retail sales rose only a modest 0.2%, a core measure favoured by analysts beat all expectations with a jump of 0.7%.