GLOBAL MARKETS-Stocks set for best Dec performance in a decade

Dec 24 (BestGrowthStock) – * World stocks up by nearly 6.5% so
far this month

* Oil rises by nearly 9% so far this month

* Inflows into developed market equity funds persist – EPFR

By Saikat Chatterjee

HONG KONG, Dec 24 (BestGrowthStock) – World stocks clung near
two-year peaks while oil rose towards the $92 per barrel mark
on Friday after yet another burst of strong economic figures
from the United States encouraged some year-end buying.

The latest rally in major European and U.S. stock indices
has given investors the biggest December gains in more than a
decade.

Expectations of strong U.S. fourth quarter performance was
further cemented by latest data which showed demand for
durable goods rising and consumer spending picking up.
[ID:nN23199992].

A slew of strong numbers coming out of the world’s biggest
economy in recent weeks has given global growth bulls another
reason to cheer and boosted commodities and stocks.

Reflecting that growing optimism, the Asia Pacific-ex
Japan shares for energy shares advanced
slightly while other indexes were broadly flat to slightly
lower.

Trading was thin and prices confined in narrow ranges in
Asia, with many centers on holiday in thin year-end markets.
U.S markets are also shut along with many European centers.

World stocks as measured by the MSCI
extended gains by nearly 6.5 percent so far this month while
the Asia-Pacific version was largely
unchanged.
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For the euro zone debt struggle, http://r.reuters.com/hyb65p
For graphic on U.S. Treasury yields,
http://r.reuters.com/cem43r
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“In the U.S., fears of a double dip recession have receded
considerably with the extension of tax relief agreed in
December and a second round of quantitative easing in
November,” Fitch Ratings said.

” High frequency activity has also turned more positive,
reflecting strength in private consumption and
corporateprofitability.”

That has made investors more sanguine towards developed
markets.

Latest EPFR data showed developed markets equity funds
posted their longest fund inflow streak since the fourth
quarter of 2009 at the expense of emerging markets equity funds.

HEADY BREW

Copper prices too stuck near record peaks while
the S&P/Goldman commodities index was set for its
best monthly performance since May 2009.

Oil maintained its upward trajectory, having gained nearly
9 percent so far this month raising concerns that more sharp
gains could be negative for Asian economies as it would feed
into inflationary expectations. The region is a net importer
of oil.

Easy money from the Federal Reserve, a strong global
economic recovery, and Chinese policymakers that still seem a
little too reluctant to sacrifice growth for necessary reforms
has proved to be a heady brew for raw materials with major
commodity indices up by 10 percent since mid-November, Gavekal
strategists said.

The euro held its ground versus majors with the
prospect of a significant short squeeze rising as the downside
momentum was fading. A breach of $1.32 could trigger a move
back towards the Dec. 17 high around $1.3360.

“The euro is still a sell-on-rally trade. Anything above
$1.32 is worthwhile selling in my view and probably there
won’t be any buyers until the low $1.30s, where we could see
some Asian central bank interest,” a trader at a U.S.
investment bank said.

Concerns on the eurozone’s debt crisis kept simmering
after Fitch cut Portugal’s ratings by a notch to A-minus,
pressuring peripheral European countries CDS higher.
[ID:nN23149674].

Benchmark 10-year U.S. Treasury yields were
steady after rising slightly overnight to 3.40 percent. They
are up by nearly 100 bps since the Fed’s announcement of its
much awaited second round of quantitative easing last month.
(Additional reporting by Ian Chua in SYDNEY and Umesh Desai;
Editing by Ron Popeski)

* For Reuters Global Investing Blog, click on

http://blogs.reuters.com/globalinvesting

* For the MacroScope Blog, click on

http://blogs.reuters.com/macroscope

* For Hedge Fund Blog, click on

http://blogs.reuters.com/hedgehub

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GLOBAL MARKETS-Stocks set for best Dec performance in a decade