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Dow Jones closes above 15,000 as world shares gain | |
(about 4 hours later) | |
The Dow Jones index closed above 15,000 for the first time as strong German factory data pushed US and European share markets higher. | |
The Dow gained 87 points to close at 15,056. Germany's Dax also hit a fresh record, gaining 70 points to 8,182. | |
Earlier, Japan's Nikkei-225 index rose above 14,000 for the first time since mid-2008 as government efforts to weaken the yen boosted exporters. | |
The German data boosted hopes Europe's largest economy has returned to growth. | |
London's FTSE 100 was up 0.6% and France's Cac 40 rose 0.4%. | |
The strong German factory orders also pushed the euro higher against the pound and the dollar, though it later fell back against both currencies. | |
'Successful' bond sale | |
Hopes of further action by central banks to boost the global economy also buoyed investors, after the Reserve Bank of Australia cut its benchmark interest rate to a record low 2.75%. | |
This followed comments on Monday from Mario Draghi, head of the European Central Bank, that the ECB stands "ready to act again" if necessary, after cutting interest rates last week. | |
Market sentiment in Europe was also lifted after Portugal issued 10-year government bonds for the first time since it received a bailout two years ago, which represented a milestone in its efforts to regain investor confidence. | |
Strong demand at the bond sale suggests the country is on course to exit its bailout. | |
European Central Bank policymaker Yves Mersch called the bond issuance an "enormous success". | |
Yields fell to around 5.5%, lower than the 7% which is considered to be economically unsustainable for a country to repay its debts in the long term. | |
Bank profits | |
Germany's Dax hit the new record after surprisingly strong industrial orders figures for March. | |
Orders for goods grew 2.2% in March compared with the previous month. February's level was revised down 0.1 percentage points, but still showed a 2.2% rise. | Orders for goods grew 2.2% in March compared with the previous month. February's level was revised down 0.1 percentage points, but still showed a 2.2% rise. |
"Today, it is really difficult not to use superlatives for describing the latest German new orders data," said Andreas Rees, chief German economist at UniCredit Research. | "Today, it is really difficult not to use superlatives for describing the latest German new orders data," said Andreas Rees, chief German economist at UniCredit Research. |
Elsewhere the FTSE was up after HSBC, Europe's biggest bank by market value, said profits more than doubled in the first quarter as it benefited from recent restructuring efforts, and booked less bad loans. | Elsewhere the FTSE was up after HSBC, Europe's biggest bank by market value, said profits more than doubled in the first quarter as it benefited from recent restructuring efforts, and booked less bad loans. |
In France, investors welcomed announcements of additional cost-cutting efforts by Societe Generale and Credit Agricole to boost their bottom line. | In France, investors welcomed announcements of additional cost-cutting efforts by Societe Generale and Credit Agricole to boost their bottom line. |
US rally | US rally |
US markets were buoyed by some positive earnings results by accessories retailer Fossil Inc and DirecTV. | |
The Standard & Poor's 500, which broke through 1,600 for the first time on Friday after strong jobs data, continued its winning streak, gaining eight points to 1,625. | |
Markets were also anticipating Disney's quarterly results after the market close. | |
Its shares have risen in recent days after Disney's Marvel Studios raked in $174.1m during the opening weekend for "Iron Man 3" and announced a venture with Electronic Arts to develop new video games based on Star Wars themes. | Its shares have risen in recent days after Disney's Marvel Studios raked in $174.1m during the opening weekend for "Iron Man 3" and announced a venture with Electronic Arts to develop new video games based on Star Wars themes. |
Exporters gain | |
The 3.6% rise in Japanese shares came as investors returned from a three-day weekend. | |
"Japanese investors returned from Golden Week national holidays in buoyant mood, bidding stocks in the Nikkei 225 average to their highest since mid-2008," said Andrew Wilkinson, chief economic strategist at Miller Tabak. | |
Japanese shares have rallied since the Bank of Japan announced new measures to pump liquidity into the financial system in an effort to get the country out of two decades of deflation. | |
That has weakened the yen against other currencies. The Japanese currency has fallen 15% against the dollar, making exporters more competitive as their products are cheaper when sold overseas. | |
For every yen that drops against the dollar, Toyota, for example, says its annual operating profit rises by 35bn yen (£230m). The dollar was trading at 99.21 yen in afternoon trading. |