Global stocks are closing out 2013 sitting on sizable gains courtesy of super-easy monetary policies and an improving economic outlook, though some emerging markets have less to crow about as funds return to rich-world assets.
The yen remained on the defensive, having been bowled over for much of the year by the Bank of Japan’s money-printing, while the euro was again proving surprisingly resilient.
Activity was sparse on Tuesday with Asia absent its star performer as the Tokyo market is shut for the rest of the week. On Monday, the Nikkei (NIK:^9452) ended with gains of no less than 56.7 percent for the year in its best performance since 1972.
The rest of the region has been far more patchy, in large part due to a rotation of funds out of emerging markets and into European and U.S. assets as those economies improve.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.23 percent on Tuesday, but hardly changed from where it started the year.
Markets in Singapore (.FTSTI), South Korea and the Philippines (.PSI) were all but flat for 2013. Shanghai’s index (.SSEC) was steady Tuesday but down over 7 percent for the year.
Australia (.AXJO) and Taiwan (.TWII) have fared better, managing gains of 15 percent and 12 percent respectively.
In New York, the S&P 500 (.SPX) finished flat on Monday but was still ahead 29 percent for the year, the biggest annual gain since 1997. The Dow (.DJI) has risen 26 percent.
Likewise, most European stock indexes eased on Monday but stayed on track for their heftiest annual gains in four years. The FTSEurofirst 300 (.FTEU3) was up 16 percent for the year.
The euro has also been performing well, reaching its highest against the dollar in over two years last week and making a five-year peak on the yen.
On Tuesday, the single currency was holding firm at $1.3806 to be up more than 4 percent for the year. Against the yen it was steady at 144.80 yen, while the dollar eased back just a touch to 104.88 yen.
The euro’s resilience has frankly baffled many commentators and investors, who had expected tough economic conditions in some member states to weigh on the single currency.
But the euro has been boosted as banks in the region repatriate funds ahead of the year-end to shore up their capital bases before an ECB Asset Quality Review and as banks repay cheap crisis loans to the central bank.
The euro zone has also been running a colossal current account surplus, worth roughly 206 billion euros in the 12 months to October. That is far larger even than China’s trade surplus and generates a steady and sizable demand for euros from exporters.
In commodity markets, hopes for global growth lifted copper and aluminum to four- and two-month highs.
Safe-haven gold was struggling at $1,197 an ounce, bringing its loss for the year to 30 percent. The attraction of equities and a general absence of inflationary pressures have the precious metal heading for its biggest annual fall in over three decades. (GOL/)
Oil prices steadied, having dipped on Monday on signs crude exports from Libya might return to normal due to a possible end to a four-month blockage of a key port.
Brent crude recouped 8 cents on Tuesday to stand at $111.29 a barrel. U.S. oil futures were up 3 cents at $99.32, but that followed a drop of $1.03 on Monday. (O/R)
Source: Reuters (Editing by John Mair)