World stocks most rise as rate-hike fears ebb

Global stocks mostly rose Friday as investors continued to ramp up purchases as equities have stabilized following a bout of volatility earlier in the month. The Dow finished narrowly positive, up 0.1 percent 25.219,38, following a choppy session. Despite the muted finale, the week was the sixth straight positive close for the blue-chip index as it notched its best weekly gain since November 2016.  European stocks were broadly higher, while the dollar rebounded after striking a new three-year low against the euro and touching a 15-month low against the yen.

"European stocks are higher today as traders' levels of optimism rise," said market analyst David Madden at CMC Markets UK. "The bullish momentum is growing, and the higher equity markets rise, the more it encourages other investors to jump on the bandwagon."

Some, however, questioned the assumption stock markets were back in full swing, and had brushed off last week's dizzying falls as a one-off correction. "There is still much debate about whether another bout of volatility is required to properly clear out vested interest from such a period of protracted complacency, and whether equities are still overvalued even after a 10 percent correction," said Mike van Dulken, head of research at Accendo markets.

Trading was generally subdued in Asia as many markets, including in China, Hong Kong and South Korea, were closed for the Chinese New Year break. But Tokyo's benchmark Nikkei 225 index gained 1.2 percent.  This week's rebound follows a sharp drop that sent major indices down more than 10 percent -- considered correction territory.

"The pace of the correction we saw dictated the pace of the recovery," said Art Hogan, chief market strategist at Wunderlich Securities, adding that he expects 2018 to be much more volatile than the unusually placid 2017. In currency trading, the dollar began to rebound in European hours, but not until after it struck a new three-year low of $1.2555 against the euro.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said "the dollar has not been valued this low since traders began to price in the normalization of US interest rate policy from the Federal Reserve that began in 2015." He said the prospect of higher yields on US bonds was no longer pulling investors to buy dollars.

"Investors are instead focusing on the development of economies that are within the remit of other central banks," he said. Markets expect Britain, the eurozone and Japan soon will begin signaling increases in interest rates, thus making their currencies relatively attractive for investors. But Fawad Razaqzada, at Forex.com, said there were signs Friday that the dollar is "on the verge of a comeback."

-AFP, New York