A key index of global equity markets rose to a 20-month high on Friday, with Wall Street shares hitting records for a second straight day, as investors continued to bask in the afterglow of US President Donald Trump’s promise of tax reform.
The dollar hovered near an 11-day high against a basket of major rivals, as Trump and Japanese Prime Minister Shinzo Abe opened two days of talks looking to cement a decades-old alliance.
The MSCI’s world index, which tracks shares in 46 countries, rose after evidence of Chinese growth lifted shares in Asia and Europe. Strength on Wall Street boosted the index further and it was up 0.41 per cent to the highest since May 2015.
Trump’s promise of a “phenomenal” tax plan helped reignite a post-election rally in stocks, which had stalled in recent weeks on concerns over his protectionist stand and the lack of clarity on policy reforms.
“Investors were worried that the administration may have gotten off track and was pursuing other items,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“Tax cuts have gotten put back on the front burner,” Forrest said, adding, “We are looking for gains in the economy at large from this, not just (earnings per share) gains in stocks.”
The Dow Jones Industrial Average rose 96.97 points, or 0.48 per cent, to finish at 20,269.37, the S&P 500 gained 8.23 points, or 0.36 per cent, to close at 2,316.10 and the Nasdaq Composite added 18.95 points, or 0.33 per cent, to end at 5,734.13.
The ongoing corporate earnings season added to the upbeat mood. Activision Blizzard’s shares surged nearly 19 per cent to give the biggest boost to the S&P 500 and the Nasdaq, after the videogame publisher reported higher-than-expected revenue on Thursday.