* Dollar consolidates gains after recent rally; yuan bounces
* Oil rises on planned production cuts, dlr pause
By Marc Jones
LONDON, Nov 22 World stocks on Tuesday rode the
slipstream of the first joint all-time high for Wall Street's
four main markets since 1999, while oil prices hit their highest
level since October.
A powerful earthquake hitting the same part of Japan that
suffered a nuclear disaster in 2011 nudged up the safe-haven
yen. The dollar slipped off a six-month high as the rally
in oil and metals prices also drove up commodities-linked
currencies such as the Australian dollar.
Asia's top bourses had made solid gains overnight despite
the clearest signal yet from U.S. President-elect Donald Trump
that he will shake up trade with the region.
Europe's main bourses were quickly on the front foot too
with London's FTSE, Frankfurt's DAX and the CAC
40 in Paris up between 0.6 - 0.8 percent in early trade.
The European basic resources index, which has now
doubled from its January lows, was the best performing sector
as big names Anglo American, BHP Billiton and
Antofagasta jumped 4 to 5 percent.
Stocks are benefitting from a belief that Trump spending
policies will spur growth.
"The fact Trump was elected means it is now seen as certain
that you will see a rise in inflation and that the (Federal
reserve) is going to hike rates.", said Nataxis head of equities
strategy Sylvain Goyon. "Some of his strategies are really pro
Having surged 4 percent on Monday, oil prices were nudging
$50 a barrel again. Russian President Vladimir Putin raised
hopes that producers will agree to limit output at an OPEC
meeting next week.
Benchmark bonds meanwhile were taking a break from the surge
in yields and plunge in prices since Trump's unexpected victory
earlier this month.
The difference between German and U.S. bond yields were back
near multi-decade extremes after two of European Central Bank's
top policymakers reaffirmed the bank's commitment to its mass
stimulus programme ahead of a flagged review next month.
"The return of inflation towards our objective still relies
on the continuation of the current, unprecedented level of
monetary support, in spite of the gradual closing of the output
gap," ECB President Mario Draghi said at a hearing in
The bank is also likely to be wary about the uncertainty if
Italy's government, as opinion polls currently suggest, loses a
referendum on constitutional changes just days before the ECB
The dollar's dip was a modest 0.3 percent but marked its
second day in the red having snapped a 10-day and 10 percent
rise against the yen on Monday that had taken it from 101 yen to
over 111. It was hovering at 110.71 by 0945 GMT.
Trump, outlining plans on Monday for his first day in office
next year, pledged to withdraw from the TPP Asia-Pacific free
Such a move may lead to retaliation by trade partners such
as China and could potentially derail markets, Libby Cantrill,
head of public policy at bond giant PIMCO, said.
But for now, expectations that Trump's administration will
adopt expansionary fiscal policies have pushed developed market
stocks higher and even emerging market shares seem to have
settled over the last week having initially been hit hard.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan rose 1.3 percent, pulled up by a
1.3 percent rally in Australian shares. Korean shares
and Hong Kong stocks rose 0.9 and 1.3 percent
Investors in Japanese stocks also appeared unfazed by
Tuesday's earthquake in northern Japan with the benchmark Nikkei
average closing up 0.3 percent.
"Most of the flow into stocks seems to be retail-oriented
with institutional investors preferring to sit out the rally
unless they get a clearer picture on Trump's economic team,"
said Andrew Sullivan, managing director, sales trading at
Haitong International Securities Group in Hong Kong.
The dollar's mild weakness propped up gold prices with spot
gold up 0.3 percent at $1217.70 per ounce. Gold prices
have fallen 10 percent since the U.S. election outcome.
It also helped emerging market currencies trim some losses
after a recent battering. The Chinese yuan rebounded
from a near 8-1/2 low hit on Monday.
With markets moving higher, volatility indicators receded.
The CBOE Volatility Index, a so-called "fear gauge",
fell 3.4 percent.
(Additional reporting by Saikat Chatterjee in Hong Kong)