January 3, 2018 / 6:56 PM / 3 months ago

GLOBAL MARKETS-Global shares hold record highs, dollar up ahead of Fed minutes

* Stock markets globally start 2018 on cheerful note

* S&P cruises past 2,700 as tech stocks advance

* Dollar up after strong U.S. data, ahead of Fed minutes (Updates to European markets close; adds commentary)

By Stephanie Kelly

NEW YORK, Jan 3 (Reuters) - World shares smashed records on Wednesday as U.S. equities advanced and European stocks closed higher on investor optimism in the new year, while the dollar rallied against key currencies ahead of minutes from last month’s Federal Reserve meeting.

MSCI’s gauge of stocks, which tracks shares in 47 countries, gained 0.40 percent. In 2017, the index’s best year since 2009, it set scores of record highs and rose by one-fifth in value.

U.S. equities also climbed to fresh highs on Wednesday, propelled by tech stocks. The benchmark S&P 500 breached the 2,700-mark for the first time, while the Nasdaq Composite and the Dow Jones Industrial Average also broke records.

Technology companies Oracle and IBM rose 2.47 percent and 2.92 percent, respectively, following brokerage upgrades. The shares helped boost the S&P technology index 0.86 percent.

The Dow Jones Industrial Average rose 45.72 points, or 0.18 percent, to 24,869.73, the S&P 500 gained 12.81 points, or 0.48 percent, to 2,708.62 and the Nasdaq Composite added 47.74 points, or 0.68 percent, to 7,054.64.

Tuesday, the first day of trading in 2018, saw a strong start for the indices, with the S&P and the Nasdaq hitting record closing highs.

“We had a strong start and we are likely to see a follow through in the near-term,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

In Europe, shares closed higher after a rising dollar boosted exporters and Wall Street records lifted optimism as new European MiFID II market rules took hold. The pan-European STOXX 600 index was up 0.48 percent.

Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.46 percent higher as manufacturing surveys pointed to a strong start for the European economy.

Emerging market stocks rose 0.58 percent, and Japan’s Nikkei lost 0.08 percent.


The dollar index rose 0.24 percent, snapping a three-week losing streak, after stronger-than-forecast U.S. manufacturing and construction data.

The Japanese yen weakened 0.04 percent versus the greenback at 112.35 per dollar, while Sterling was last trading at $1.3518, down 0.50 percent on the day.

The euro was down 0.27 percent to $1.2025.

Benchmark U.S. Treasury 10-year notes last rose 5/32 in price to yield 2.4471 percent, from 2.465 percent late on Tuesday.

The 30-year bond last rose 11/32 in price to yield 2.7933 percent, from 2.81 percent late on Tuesday.

Investors are also awaiting the release later on Wednesday of minutes from last month’s Federal Reserve meeting. During the meeting, Fed policy makers decided to raise short-term interest rates for a third time in 2017.

“There’s a lot of focus around the discussion around what the potential impact of the tax bill was,” said Bill Northey, a senior vice president at U.S. Bank Wealth Management in Helena, Montana.

“Certainly there had to be some discussion around the economic impacts. I think that’s going to be one of the clear pieces of information value that we can draw from these minutes.”

Hawkish comments from two European Central Bank officials sent yields higher on Tuesday, with the 10-year German Bund yield hitting a two-month peak and the five-year U.S. yield reaching its highest level since April 2011.

Elsewhere, spot gold reached its highest since mid-September on Wednesday, before edging back to $1,316.11 per ounce.

Oil prices hit fresh two-and-a-half year highs as strong output in the United States and Russia balanced tensions from a sixth day of unrest in OPEC member Iran.

U.S. crude rose 2.02 percent to $61.59 per barrel and Brent was last at $67.77, up 1.8 percent on the day.

Reporting by Stephanie Kelly; Additional reporting by Abhinav Ramnarayan and Oleg Vukmanovic in London, Sruthi Shankar in Bengaluru, Richard Leong and Gertrude Chavez-Dreyfuss in New York, and Henning Gloystein in Singapore; Editing by Nick Zieminski

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