TOKYO/WASHINGTON- World shares rallied to a record peak on Wednesday, following an overnight surge that saw the Dow Jones benchmark crack 30,000 for the first time as investors cheered a dramatically improved global outlook.
The formal start of US president-elect Joe Biden’s transition to the White House and increasing confidence a COVID-19 vaccine would be ready soon ushered in renewed appetite for global shares.
After weeks of waiting, President Donald Trump’s administration on Monday cleared the way for Biden to prepare for the start of his administration, giving him access to briefings and funding.
“The main thing now is that it has become official that the Biden administration will start.
And we have ample liquidity from the world’s central banks,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“I expect the honeymoon between financial markets and the Biden administration and stocks’ bull trend could continue until around his inauguration in January,” he said, adding reality checks could follow, once he will be sworn in.
Reports that Biden planned to nominate former Federal Reserve Chair Janet Yellen as Treasury Secretary — a move that could shift the focus heavily toward efforts to tackle growing economic inequality — also cheered markets.
That pushed MSCI’s broadest gauge of world stocks up 0.2 percent to a record level. Its index of Asia-Pacific shares outside Japan gained 0.45 percent while Japan’s Nikkei rallied 1.7 percent to a 29-year high.