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Shares, oil up as investors bet monetary policy stays easy
The liquidity provided by central banks has driven the rise in risk asset markets this year despite a patchy recovery in the world economy and investors have been seeking reassurance that the support will continue.
"Central banks are protecting the downside for now but the question is for how long," said Lex van Dam, hedge fund manager at Hampstead Capital.
Comments from a U.S. Federal Reserve official on Monday backing the current aggressive monetary stimulus and a decision by Australia's Reserve Bank to keep its interest rates at record lows have bolstered hopes these policies will remain in place.
In Europe the optimism lifted the pan-European FTSEurofirst 300 index .FTEU3 by over one percent to 1,178.12 points at the open to a fresh two-year high. While London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI all opened sharply higher.
Gold rose nearly half a percent to $1,580.76 an ounce after four straight sessions of falls.
Copper, iron ore and oil also rose helped by a promise from China's government to deliver economic growth of 7.5 percent this year.
U.S. crude was up 0.5 percent at $90.55 a barrel while Brent rose 0.6 percent to $110.75. <O/R>
(Reporting by Richard Hubbard; Editing by Anna Willard)