Strength on Wall Street boosts world economy

28 / 12 / 2016 | Market News
The dollar continues to rally as overnight, the Nasdaq Composite rose to a new record high of 0.5%.  The Dow Jones Industrial Average closed in on the 20,000-point mark on robust data.  Consumer confidence in the United States climbed to its highest reading since August 2001 of 113.7, according to data released on Tuesday. Market participants anxiously await President-elect Donald’s Trump’s corporate tax cuts and economic stimulus in hopes that it will boost the United States economy.

Strength on Wall Street drove up Australian stocks and the Asian session saw higher shares. Australia’s S&P/ASX 200 XJO, +1.01%   was up 0.9% after a four-day weekend, led by a rally among commodities stocks. Among those, BHP Billiton BHP, +3.29%   gained 3.7%, Rio Tinto RIO, +2.38%   added 2.6% and Fortescue Metals FMG, +3.47%   surged 3.6%. The day’s biggest gainers were stocks from Southeast Asia.  An example was the JSX index JAKIDX, +1.50% in Indonesia up 1.8%.

After the company disclosed that several billions of dollars worth of write downs may be needed to cover costs of construction for its U.S. nuclear reactors, Toshiba Corp. shares sunk 20.4%. 

In Europe, Monte Paschi fell to its lowest closing level since it listed in 1999.  A state rescue of the bank looks inevitable at this point.  Despite the bank’s slide downwards, European bank shares have rallied strongly over the past two weeks.  This was helped by expectations of easing regulatory pressure and rising bond yields.

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