January 16, 2018, 11:05 pm
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World stocks touch new high, dollar decline deepens

NEW YORK - A global stocks index touched a fresh record high, wrapping up a week when many of the world’s major central banks either raised interest rates or signalled they might do so, underlining confidence about economic growth and inflation.

The U.S. dollar slipped, continuing its slide in the wake of the Federal Reserve’s decision on Wednesday to boost interest rates but maintain a gradual pace of hikes this year.

Investors were also watching a meeting of global finance chiefs in Germany beginning on Friday. The world’s financial leaders will renounce competitive devaluations and warn against exchange rate volatility, a document showed. 

MSCI’s all-country world stock index was little changed after touching an all-time high earlier in the day.

The Fed raised rates for the second time in three months on Wednesday and China hiked rates on Thursday, while Britain and a European Central Bank policymaker hinted at higher rates.

“It looks like the rest of the central banks may be thinking about tightening up a little bit,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

“It confirms that growth is improving both domestically and globally, which is what everyone has been looking for ... They wouldn’t be doing that if their economies still needed aggressive monetary stimulus.”

On Wall Street, the benchmark S&P 500 ended slightly lower, as bank shares fell alongside Treasury yields.

The Dow Jones Industrial Average fell 19.93 points, or 0.1 percent, to 20,914.62, the S&P 500 lost 3.13 points, or 0.13 percent, to 2,378.25 and the Nasdaq Composite added 0.24 points to 5,901.00.

The pan-European index gained 0.2 percent. European bank stocks touched their highest point in more than a year after an European Central Bank policymaker kindled talk of a possible rate hike. 

The ECB will decide later whether to raise interest rates before or after ending its bond purchase program, policymaker Ewald Nowotny told a newspaper.  - Reuters
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