Global equities remain high; US stocks climb further

14/07/2016 05:34 AST

Equities kept on pushing higher around the world on Wednesday, with US stocks climbing further into record territory, even though it appeared this week’s rally was running out of steam.

The Dow Jones Industrial Average added 0.2 per cent in the first five minutes of trading and the broad-based S&P 500 advanced 0.1 per cent after both set new closing records on Tuesday.

“The expectation that further stimulus measures will be forthcoming - and that the Federal Reserve isn’t going to raise the fed funds rate soon - has been a huge driver of the latest, unbelievable rally effort,” said Briefing.com analyst Patrick O’Hare.

“Investors appear optimistic as international shares advance amid easing “Brexit” concerns,” said analysts at Wells Fargo.

Meanwhile in Europe, London’s benchmark FTSE 100 index was up 0.09 per cent as British Prime Minister David Cameron bowed out Wednesday after his resignation in the wake of Britain’s vote to quit the European Union.

Theresa May steps up from her role of interior minister in the Conservative government to take over as prime minister, where she will have to quickly assemble a team to negotiate Britain’s exit from the EU and secure trade deals with other major economic partners.

In the eurozone, Frankfurt’s DAX 30 eked out a gain of 0.06 per cent and the Paris CAC 40 gained 0.4 per cent. “Stocks across Europe were flat on Wednesday morning in a sign that the strong rally that started the week has run out of steam,” said CMC Markets analyst Jasper Lawler.

While many analysts say concerns about Brexit are easing, Germany on Wednesday issued a 10-year bond at negative interest rate for the first time, an indication that many investors are still worried about the future.

Negative bunds - The 10-year German government bond or “Bund” is regarded as one of the safest investments and investors often turn to it as a “safe haven” during crises.

It is the first time that investors have accepted negative returns in the first issue of a bond, meaning they will pay for the privilege of owning rock-solid Bunds.

The Gulf Today