Global stocks set new records in August

Stock markets set new record highs on Tuesday as investors ended August in a buoyant mood, confident of an ongoing economic recovery and that the Federal Reserve’s eventual paring back of its stimulus would not knock asset prices anytime soon.

European stocks are on course for their seventh straight month of gains.

The pan-European Stoxx 600 index gained 0.2%, with Asian stocks reversing earlier losses as fresh signs of a slowdown in China’s economy spurred hopes of more stimulus.

The German Dax climbed 0.46% while France’s CAC 40 was 0.1% higher. Wall Street futures were higher ahead of the US open and after closing at or near record highs on Monday.

The MSCI world equity index, which tracks shares in 50 countries, rose 0.28%.

“While risks remain and investors should reflect this in their portfolios, we believe the backdrop for equities remains positive,” said UBS Global Wealth Management Chief Investment Officer Mark Haefele. “We advise investors to position for reopening and recovery.”

Rising cases of the Covid-19 Delta variant have hurt Asian shares in recent weeks but have mostly been ignored by European and US markets, as investors continue to bet that plentiful stimulus and rising corporate profitability will fuel asset price gains even after such a strong run so far this year.

Outside of stocks, the dollar, a safe-haven currency and barometer of risk sentiment, fell to a three-week low. The euro rose 0.3% to $1.1827 against a weaker dollar.

Published in The Express Tribune, September 1^st, 2021.

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