World stocks advance on strong data, earnings

LONDON (Reuters): Global stocks climbed on Monday, with strong U.S. data and encouraging third-quarter earnings easing concerns about the pace of global economic recovery and raising appetite for riskier assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

The MSCI world equity index, which tracks shares in 45 countries, was up 0.3% by 4:21 a.m. EDT.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 1.2% overnight as an upbeat survey of U.S. consumer sentiment on Friday brought some calm to markets after a week of turbulence.
The pan-European FTSEurofirst 300 index fell 0.3%, however, as a profit warning by technology company SAP hit shares in the sector.
The Thomson Reuters/University of Michigan index of consumer sentiment rose to its highest in more than seven years in early October, beating expectations. New housing starts were also surprisingly strong last month, suggesting U.S. economic growth remained solid.
“Calm returns after last week’s roller-coaster ride,” Saxo Bank trader Andrea Tueni said. “U.S. macro data is reassuring, the earnings season has been quite good so far, and we’re getting positive news such as Japan’s big pension fund boosting its exposure to equities. “Sentiment remains fragile, but we get the impression that stocks have hit a low.”
Japan’s $1.2 trillion Government Pension Investment Fund – the world’s biggest, with a war chest bigger than the annual output of Mexico’s economy – is likely to raise its allocation for domestic stocks to about 25 percent, people familiar with the process said on Saturday.
The stock market also got some support from encouraging U.S. earnings reports. Out of the 81 S&P 500 component companies that have reported third-quarter results, 64.2% have beaten expectations, a rate slightly below the average over the past four quarters but better than the past 20 years.
On Wall Street, all major stock indexes rose more than 1% on Friday, while Japan’s Nikkei surged 4% on Monday to post its biggest daily rise since June 2013 on upbeat U.S. data and as a weaker yen helped exporters.