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Stocks break through 2007 peak in global rally

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Stocks headed for a record close, buoyed by fresh all-time highs for US equities with investors energised by the outlook for profits and tax reform. Hong Kong’s Hang Seng Index breached the 30,000 level to climb to the highest in a decade.

The MSCI Asia Pacific Index climbed above its 2007 peak, with shares higher from Tokyo to Sydney. All major American benchmark equity indexes reached all-time highs on Tuesday and Goldman Sachs Group Inc. lifted its forecast for U.S. stock gains in 2018, saying strong economic growth and tax reform will improve corporate earnings. The Korean won jumped to its highest in more than two years. The dollar maintained losses as the Treasury yield curve flattened further amid a global sovereign-bond rally. Oil headed for its highest close in more than two years.

While the Thanksgiving holiday gives traders an excuse to pause, global stocks are adding to what’s been a stellar year for equity returns amid optimism about global growth and company earnings. The bond market has been showing fixed-income traders are more concerned that the US economy may slow with the gap between the yield on longer dated Treasuries and shorter-term bonds narrowing to levels not seen for 10 years.

“The earnings picture is dominant and that’s of course what has, and will continue, to move markets,” Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV. “Icing on the cake is the tax bill and that does boost earnings but a lot of people are already baking that into their assumption.”

The Australian dollar briefly rose as high as 75.96 US cents after data on completed construction work in the third quarter surprised on the upside, jumping 15.7 per cent from the previous quarter, beating estimates of a 2.3 per cent drop.

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