World stocks rose and oil prices hit a 2009 high on Wednesday, while government bonds and the yen fell, after a jump in U.S. consumer morale reinforced expectations that the global economy is starting to recover.
Wall Street rallied on Tuesday after data showed U.S. consumer confidence posted its biggest monthly jump in six years. The pace of decline in prices of U.S. single-family homes slowed in March for a second consecutive month, while Japanese exports rose for a second month in April.
Improving data, action by central banks around the world to inject liquidity and massive government stimulus packages are boosting expectations that the global economy is gradually coming out from its worst downturn since the 1930s.
"Liquidity rallies can last quite a while, perhaps more than a year," said Franz Wenzel, strategist at AXA Investment Managers in Paris. "Excess liquidity is more in favour of riskier asset classes like equities." The MSCI world equity index rose half a percent, edging towards a six-month peak set last week.
The FTSEurofirst 300 index rose 0.6 percent, led by banking shares, including Societe Generale, HSBC and Barclays.
Emerging stocks rose 2 percent.
Other analysts say a push towards new high for world stocks requires more economic data to improve and back up optimism for a recovering economy.
"We believe it is important to remember that less bad economic news is not the same as actual good news," said Bob Doll, vice chairman and global chief investment officer of equities at BlackRock.
"As such, we believe the rally that started in early March may have run out of steam and that a resumption of the rally will require more solid evidence of an economic recovery."
U.S. crude oil rose as high as $63.05 a barrel, its highest since November, as signs of an economic recovery boosted expectations oil demand would rebound. Oil prices are now almost double the four-year low of around $33 hit in December.
The June Bund future fell 44 ticks.
The yen fell a third percent to 95.28 per dollar while it hit a six-month low of 152.53 per sterling.
The dollar was steady against a basket of major currencies, having hit a 4-1/2 month low last week.
