• Tuesday, July 29, 2014

Global stocks erase losses as $3tn of value restored

Star Online Report
A trader works on the floor of the New York Stock Exchange (NYSE) in New York. Photo: Bloomberg
A trader works on the floor of the New York Stock Exchange (NYSE) in New York. Photo: Bloomberg

Global stocks erased their losses for the year as growing confidence in the US economy and a rally in emerging markets restored $3 trillion of market value, reports Bloomberg.

The MSCI All-Country World Index advanced for a ninth straight day yesterday, lifting the value of world equities to $62.1 trillion from this year’s low of about $59 trillion on February 4, data compiled by Bloomberg show. The gauge of developed and emerging shares rose 0.1 percent at 10am in Hong Kong.

Equities have rebounded from the worst start to a year since 2010 after American unemployment fell to the lowest level since 2008, Chinese trade increased and developing nations from Turkey to South Africa took steps to stem capital outflows.

Equity funds tracked by EPFR Global and Citigroup Inc lured more than $11 billion in the week to February 12, led by the US after Fed Chair Janet Yellen said economic growth has picked up and pledged to pare back stimulus in “measured steps.”

“The global economy is still expected to be reasonably solid,” said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management, which oversees about $60 billion. “Although the Fed continues to buy less bonds, Yellen stated she would try to keep liquidity conditions fairly easy. That was helpful.”

Italy’s FTSE MIB Index (FTSEMIB) has led gains among equity gauges in the world’s 20 largest markets in 2014, adding 7.9 percent as data showed the euro-area economy expanded more than forecast in the final quarter of 2013.

The Standard & Poor’s 500 Index, the benchmark measure of US stocks, slipped 0.5 percent this year through last week, with American markets closed for a holiday yesterday. The Shanghai Composite Index (SHCOMP) has added 0.2 percent.

The MSCI All-Country index is valued at about 14 times estimated earnings for the next 12 months, versus its five-year average of 12 times, according to data compiled by Bloomberg.

Published: 10:14 am Tuesday, February 18, 2014

Last modified: 9:01 pm Tuesday, February 18, 2014

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