Stock Rally Extends on Tech Boom

Global equity markets extended recent gains Wednesday, with European and Asian stocks following the tech-driven advances that have propelled U.S. stocks to fresh records.

The Stoxx Europe 600 index was up 0.3% shortly before U.S. markets opened, helped by a 1.1% rise in European technology sector.

U.S. equity futures pointed to further gains ahead of market open in New York, with the S&P 500 and Dow Jones Industrial Average each up by 0.2%.

A surge in tech stocks sent the Nasdaq Composite Index above 7,000 for the first time on Tuesday.

The U.S. dollar steadied after falling for a seventh-straight session, according to the WSJ Dollar Index, up 0.1% against a basket of international currencies. But the greenback remains near its lowest levels in over three months.

The dollar is vulnerable to further weakness, according to some analysts. Lee Hardman, a currency analyst at MUFG, said he believes a multiyear dollar bear market is beginning, with further rapid declines possible.

"Historical precedent continues to suggest that our outlook for more modest U.S. dollar weakness in 2018 could prove too cautious," Mr. Hardman said.

The euro fell 0.3% to $1.202 Wednesday, after hitting its highest New York closing price in three years Tuesday. Some investors expect the euro to continue strengthening on the back of unexpectedly strong economic conditions.

"Europe continues to enjoy the most important growth acceleration that we've seen in over a decade," said Alessio DeLongis, portfolio manager at OppenheimerFunds.

"We think it's an environment that's conducive to inflows into Europe, into equities particularly, and therefore into the euro," he added.

In bond markets, yields on Germany's 10-year government bonds dipped slightly to 0.433%, erasing most of Tuesday's rise, while 10-year U.S. Treasury yields fell slightly to 2.451%. As recently as September, 10-year yields were as low as 2.03%.

"People really need to pay attention to what bond markets are telling you," said Stephen Macklow-Smith, head of Europe equity strategy at J.P. Morgan Asset & Wealth Management. "We're in an environment where central banks are starting to retreat from outright monetary stimulus."

"You've seen 10-year rates picking up almost everywhere, and in stocks that means a move from defensives to cyclical equities," he added.

Leading Asia-Pacific equities Wednesday was China, where stocks outside of the biggest companies badly lagged behind 2017's global rally. The country's Shenzhen A-share index rose by 0.8%.

Hong Kong's Hang Seng Index closed up 0.2% after having earlier touched a fresh 10-year intraday high.

Japanese markets were closed and won't open for their first day of trading in 2018 until Thursday.

Overall, investors appear to be seeking value in Asian stocks, according to an analysis by Instinet, with increased buying of companies with low price-to-earnings multiples. On that basis, the region's equities are generally cheaper than in Europe or the U.S.

The Taiex in Taiwan, where many Apple suppliers are based, climbed 0.9% to hit a fresh five-week high. South Korean giant Samsung Electronics rose 1.2%, helping the benchmark Kospi gain 0.3%.

Fresh intraday records were registered Wednesday in New Zealand, Thailand and the Philippines -- the latter two strengthening 1% and 2% respectively.

Bitcoin dipped back below $15,000, according to price data from CoinDesk, after an overnight jump fueled by Silicon Valley venture-capital firm Founders Fund making a big bullish bet on the cryptocurrency.

Write to Mike Bird at and Kenan Machado at

(END) Dow Jones Newswires

January 03, 2018 08:38 ET (13:38 GMT)