TMX Group Inc. signage is seen at the Toronto Stock Exchange (TSX) in this file photo.Pawel Dwulit/Bloomberg
U.S., Canadian and European stocks rose with commodities as data bolstered optimism in the economies of China and Germany. Crude touched an 18-month high and the dollar rallied.
The Dow Jones Industrial Average resumed its advance toward 20,000, while European equities headed for a bull market as the pace of German inflation doubled last month. Copper led metals higher after Chinese manufacturing closed the year on a relatively robust note. U.S. crude soared to the highest since July 2015 as Kuwait cut output. A drop in Treasuries sent 10-year yields past 2.50 per cent, while a gauge of the dollar headed for the strongest close since 2002.
The strong start to 2017 marks a reversal from a year ago, when concern over China's economy roiled global financial markets. The world's second-largest economy has been a source of strength in recent weeks, improving investor risk appetite following a period of caution at year-end. Advances in the dollar and U.S. stocks sparked by Donald Trump's election resumed after fading in the final weeks of the year.
"Equities are making a very positive start to 2017," said Michael Van Dulken, head of research at Accendo Markets in London in a note to clients. "Investors have clearly retained their pre-Christmas bullishness, preferring to focus to the positives rather than dwell on political uncertainty."
Stocks
The S&P 500 Index added 0.8 per cent to 2,255.81 at 9:31 a.m. in New York, halting its first three-day slide since the election. The index finished 2016 with 9.5 per cent gain. The Dow rose 144.09 points Tuesday to 19,906.69.
Canada's main stock index rose on Tuesday, with the heavyweight energy and financial groups leading broad-based gains as oil rose.
The Toronto Stock Exchange's S&P/TSX composite index was up 115.67 points, or 0.76 per cent, at 15,403.26, shortly after the open. Nine of the index's 10 main groups were higher.
The Canadian dollar was up 0.18 to 74.50 cents (U.S.).
The Stoxx Europe 600 Index climbed 0.9 per cent, poised to cap a 20 per cent advance from its February 2016 low that would meet the definition of a bull market.
Cyclical shares including banks, miners and carmakers led gains, while defensive stocks deemed more immune to economic growth trailed.
Next Plc slid 3.3 per cent for one of the worst performances on the Stoxx 600 after Deutsche Bank AG lowered its recommendation on the retailer to hold from buy.
Bonds
Treasuries dropped, with 10-year yields rising six basis points to 2.5 per cent. U.S. cash bonds opened in London this morning having been closed since Dec. 30.
German bonds fell as data showed inflation accelerated to the fastest rate since 2013. The yield on the nation's 10-year securities dropped to the lowest level since November on Monday.
French bonds were among the biggest decliners in Europe after the nation was said to mandate banks for the sale of a new Green bond in the 15– to 30-year area. France is due to sell 10-, 20-, 30– and 50-year bonds on Jan. 5.
Commodities
Crude oil rose 2.5 per cent to $55.04 a barrel in New York, touching the highest level since July 6, 2015.
Gold futures traded little changed at $1,151.30 an ounce in New York.
Nickel jumped 1.4 per cent to $10,160 a ton on the London Metal Exchange, and copper rallied 1 per cent to $5,588 an ounce.
Currencies
The U.S. Dollar Index increased 0.6 per cent, headed for its highest close since December 2002.
The yen slid 0.6 per cent to 118.19 per dollar, while the euro traded down 0.6 per cent to $1.0394.
Turkey's lira weakened the most among major world currencies on Tuesday, falling as much as 1.7 per cent to a new record.
Bloomberg News, with files from Reuters