GLOBAL MARKETS-Shares near 5-year high as data, central banks support

Tue May 7, 2013 10:44am EDT

* MSCI world share index at highest since 2008, DAX at
record high
    * German data lifts euro, possible ECB action caps gains
    * Aussie dollar falls on RBA rate cut


    NEW YORK, May 7 (Reuters) - World stock indices hit their
highest levels in almost five years on Tuesday, with the German
benchmark joining the S&P 500 at a record high after
unexpectedly strong data amid signs top central banks will
remain supportive of growth.
    Wall Street edged up at the open, with the S&P touching an
intraday high of 1,623.74.
    Recent gains in U.S. equities have come on strength in
technology, basic materials and banking shares, sectors that are
closely related to an economy in expansion.
    "If this rotation into cyclical stocks from defensive ones
continues, that will be a very healthy sign for us," said Art
Hogan, managing director at Lazard Capital Markets in New York.
    He said, however, that Wall Street could drift along this
week with little in the U.S. data calendar to give direction.
    "All the recent catalysts have been priced in and markets
are at a level they're comfortable with," Hogan said.
    In morning trading in New York, the Dow Jones industrial
average was up 33.25 points, or 0.22 percent, at
15,002.14. The Standard & Poor's 500 Index was up 2.84
points, or 0.18 percent, at 1,620.34. The Nasdaq Composite Index
 was down 2.53 points, or 0.07 percent, at 3,390.44. 
    MSCI's global index, which tracks stocks in
45 countries, edged past its June 2008 high in Asian trading
after Japan's stock market, which had been closed on Monday,
soared in a delayed reaction to Friday's strong U.S. jobs data.
The global index was up 0.4 percent at 372.60.
    The momentum continued in Europe, where the DAX hit
a record as German industrial orders for March rose 2.2 percent
from February, beating a forecast of a 0.5 percent drop on
strong demand from the euro zone. 
    With key economies like the United States seeing a patchy
recovery but others struggling to maintain growth, major central
banks around the world have shown over the last few weeks they
intend to keep stimulus flowing freely for the time being.
    Australia's central bank cut rates to a low of 2.75 percent
on Tuesday and suggested it may ease further. The move followed 
European Central Bank chief Mario Draghi saying on Monday that
the ECB was ready to trim rates again if needed, after a rate
cut last week. 
    The growth-linked Aussie dollar was last at
US$1.0173, down 0.7 percent on the day.
    Draghi's comments that the ECB could cut rates, including
pushing its deposit rate into negative territory, kept downward
pressure on the euro, although the stronger German data
pushed it back near $1.31, up 0.2 percent on the day.
    Spanish and Italian bond yields - a
proxy for borrowing costs - were both slightly lower while
safe-haven German Bund yields were at a three-week high.
 
    U.S. Treasuries yields rose to three-week highs as traders
prepared for the sale of $32 billion in new 3-year notes.
    Benchmark 10-year note yields rose to 1.78
percent, up from 1.76 percent on Monday and the highest since
April 12.
    Many analysts see yields as unlikely to march significantly
higher from unless there are new signs that the economic
recovery is not slowing as much as feared.
    "One decent number is not strong enough to completely change
the mood of market players," said Jason Rogan, managing director
of Treasuries trading at Guggenheim Partners in New York. "We're
getting close to a point where you might start to see some
buying."
    Prospects the U.S. economy will lead global growth lifted
industrial commodities, although persistent worries about demand
from top consumers such as China tempered gains. 
    Three-month copper hit a three-week high of $7,374 a
ton but then fell 0.4 percent a day after its largest daily
percentage gain since October 2011. Copper prices are almost 9
percent lower for the year.
    Brent crude oil prices edged up, supported by strong German
data, central bank policy and tension in the Middle East. Oil
rose in Monday as Israeli air strikes on Syria escalated
tensions in the Middle East, trumping worries about global
demand.
    Brent was last up 0.1 percent at $105.58 while U.S. crude
 shed 0.3 percent to $95.85.
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