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* MSCI All-Country World Index hits record high
* Bitcoin trades above $32,000
* Yuan surges nearly 1% vs. dollar
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
By Ritvik Carvalho
LONDON, Jan 4 (Reuters) - World stock markets hit record
highs on Monday, the first trading day of the new year, as
investors hoped the rollout of vaccines would ultimately lift a
global economy decimated by the COVID-19 pandemic.
The Chinese yuan surged nearly 1% against the dollar,
while the greenback plumbed its lowest levels against a basket
of peer currencies since April 2018. Bitcoin hovered
above $32,000 on the back of a blistering 800% rally since
mid-March.
European stocks opened higher, with Britain's FTSE 100
gaining 1.75%, Germany's DAX up 1.1%, Spain's
IBEX up 1.3% and Italy's FTSE MIB rising
0.7%.
MSCI's All-Country World Index, which tracks
stocks across 49 countries, hit a record high and was up nearly
half a percent on the day after the start of trading in London.
"The year kicks off as 2020 ended, an everything rally with
the double V dichotomy (virus vs. vaccine) seeing the hopes that
either things get worse and stimulus ramps up or things get
better and, well, things get better so long as there’s no hint
of liquidity withdrawal and a taper tantrum," a trader said.
Asian stock markets also gained, although Japan's Nikkei 225
index shed early gains, falling 0.4% after Prime
Minister Yoshihide Suga confirmed the government was considering
a state of emergency for Tokyo and three surrounding prefectures
as the coronavirus spreads.
Despite the optimism over vaccines, investors are still
sounding caution over the path of the virus, which continues to
spread amidst the discovery of a new strain.
"The virus retains the upper hand for a while longer," said
Karl Steiner, chief quantiative strategist at SEB, noting that
vaccinations have had an uneven start, characterized by vaccine
shortages, vaccine resistance and delays.
Britain began vaccinating its population with the COVID-19
shot developed by Oxford University and AstraZeneca on
Monday.
With the lag between a full vaccine rollout and a global
economic recovery, investors will count on central banks to keep
money cheap.
"We continue to believe that equities have further room to
rise in 2021 as monetary and fiscal stimulus measures provide a
tailwind, and we anticipate significant earnings growth as the
global economy recovers," said Mark Haefele, chief investment
officer at UBS Global Wealth Management.
Minutes of the Federal Reserve's December meeting are due on
Wednesday and should offer more detail on discussions about
making their forward policy guidance more explicit and the
chance of a further increase in asset buying this year.
E-Mini futures for the S&P 500 were steady after also
touching a record high.
PAYROLLS A RISK
The data calendar includes a raft of manufacturing surveys
across the globe, which will show how industry is coping with
the spread of the coronavirus, and the closely watched ISM
surveys of U.S. factories and services.
Chinese factory activity continued to accelerate in
December, though the PMI missed forecasts at 53.0.
Japanese manufacturing stabilised for the first time in two
years in December, while Taiwan picked up.
Friday sees the U.S. December payroll report where median
forecasts are for only a modest increase of 100,000 jobs.
Analysts as Barclays are tipping a fall of 50,000 in jobs,
which would be a shock to market hopes of a speedy recovery.
"A number of incoming indicators on activity point to slower
momentum as the economy closes out the year, including data on
labour markets where initial claims rose during the December
survey period," said economist Michael Gapen in a note.
Such a drop would add pressure on the Fed to ease further,
another burden for the dollar which is already buckling under
the weight of the massive U.S. budget and trade deficits.
In currencies, the euro pushed back up to $1.2281,
having run into profit-taking late last week when it reached the
highest since early 2018 at $1.2309. It gained almost 9% over
2020.
The dollar slipped to 102.80 yen. Sterling firmed to
$1.3690, levels last seen in mid-2018.
The decline in the dollar has been a support for gold,
leaving the metal 1.3% firmer at $1,931 an ounce.
Oil prices extended their rise after a couple of months of
solid gains, with Brent crossing $53 a barrel. U.S. crude
added 2% to $49.52 a barrel.
(Reporting by Ritvik Carvalho; additional reporting by Carolyn
Cohn in London and Wayne Cole in Sydney; Editing by Toby Chopra)
