GLOBAL MARKETS-Shares, bonds rally, dollar tumbles after Fed cools taper talk

Thu Jul 11, 2013 3:46am EDT

* Dollar tumbles 1.2 percent after dovish Fed
    * European shares rise almost 1 percent, Asian stocks gain
    * German Bunds track U.S. Treasuries higher
    * Commodities from oil to copper see gains

    By Marc Jones
    LONDON, July 11 (Reuters) - Shares and bonds rallied
globally on Thursday and the dollar tumbled, after the head of
the Federal Reserve signalled the U.S. central bank may not be
as close to winding down its stimulus programme as markets had
started to believe.
    This came despite minutes showing half of Fed policymakers
think the programme should stop by the end of this year. 
    As investors cheered the prospect of ongoing support, risk
assets performed strongly.
    European bonds from Germany to Greece tracked gains in U.S.
debt and European shares opened up almost 1 percent, 
pushing MSCI's world index, which tracks stocks
in 45 countries, to its highest in almost a month.
    "Bernanke's comments were taken by the markets as much more
dovish so I suspect it will be a good day for risk markets and I
don't expect that to change in the near term," said Saxo bank
Chairman and senior market analyst, Nick Beecroft.  
    "We are still in a bit of a sweet spot for equity markets.
The economy is doing well enough to encourage equity markets
about future earnings, but not too hot to cause the Fed to
remove accommodation."
    The dollar tumbled 1.2 percent against a basket of
major currencies while the euro roared to a three-week
high of $1.32085 at one stage, though it was back at $1.3038 by
0720 GMT.
    Copper prices gained 3.2 percent to exceed $7,000 a
tonne, hitting a three-week high and extending the previous
session's 1.4 percent rise as the dollar softened.
    Gold climbed 2.4 percent to a three-week high and was
on track for a fourth straight day of gains while U.S. crude oil
prices added 0.7 percent to their highest level since
March 2012, extending Wednesday's 2.9 percent jump.
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