By Riva Gold
Stocks in Europe and Asia jumped Wednesday as a climb of more than 100 points in the Dow Jones Industrial Average rippled across the globe.
Flows to haven assets continued to reverse, with gold down 0.8% at $1,201 an ounce and government bond yields on track for their highs of the year.
The Stoxx Europe 600 advanced 1.1% in morning trading, following a 1.4% rise in Japan and modest moves higher elsewhere in Asia. Futures pointed to a 0.3% opening gain for the S&P 500, after both the S&P 500 and Nasdaq Composite closed at records on Tuesday and mining and manufacturing companies helped lift the Dow Jones Industrial Average to its highest close in two weeks.
Some traders attributed the rise on Wall Street to President Donald Trump's plans to boost infrastructure projects. Mr. Trump took steps Tuesday to revive two oil pipeline projects and issued directives that aim to ease regulations on infrastructure projects and U.S. manufacturing.
The construction and materials sector rose 1.5% in Europe Wednesday, while the basic resources sector also added 1.2% after closing at its highest since 2014, supported by a climb in Chinese iron-ore futures and copper prices. Shares of BHP Billiton were up 1.3% even after the world's largest miner by market value cut its copper output forecast.
Banks and financials were the best performers in Europe, however, as bond yields recovered and corporate earnings proved supportive. Shares of Banco Santander were up nearly 5% after the Spanish lender kicked off Europe's bank earnings season with a bigger-than-expected rise in fourth quarter profit.
In currencies, the WSJ Dollar Index inched up 0.1%, with the dollar last down 0.1% against the yen and 0.3% against the British pound but up 0.1% against the euro, up 0.4% against the Australian dollar and up 1% against the Turkish lira.
The Mexican peso fell 0.1% with Mr. Trump expected to announce plans shortly to expedite construction of a wall along the Mexican border.
In government bond markets, the yield on the 10-year U.S. Treasury note rose to 2.485% from 2.471% after its biggest daily gain of the year, while Japanese government bonds came under selling pressure at 0.85%.
The 10-year German bund yield rose to 0.376% from 0.325%. A top European Central Bank official said Tuesday the bank should start to wind down its massive bond-purchase program soon.
"I am...optimistic that we can soon turn to the question of an exit" from easy-money policies, said Sabine Lautenschläger, who sits on the ECB's executive board.
Chinese government bond yields neared their highest levels since 2015 after the central bank unexpectedly raised interest rates on a type of special loans to certain financial institutions.
and Tom Fairless contributed to this article.
Write to Riva Gold at firstname.lastname@example.org
(END) Dow Jones Newswires
January 25, 2017 05:09 ET (10:09 GMT)
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