World stocks hold onto gains, dollar under pressure

LONDON (Reuters) – World stocks clung to recent gains on Monday following healthy advances in Asia on hopes for a U.S.-China trade deal, a more optimistic growth outlook and a softer dollar, while the euro climbed to a 4-1/2 month high.

Yet European stock markets failed to follow the lead and took a breather following last week’s record highs.

The pan-regional Euro Stoxx 600 STOXX was down 0.3% while Germany’s DAX .GDAXI slipped 0.5%. Banks .SX7P, which had been lagging the 2019 rally, were the only sector to mark small gains in thin year-end trading.

“Investors appear to be growing a tad apprehensive about chasing the record setting U.S. equity market risk-reward premise into year-end,” Stephen Innes at AxiTrader wrote in a note to clients. “Much focus continues to fall on the abundance of liquidity offered up by the Fed as a critical driver behind the late-season equity market window dressing.”

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