Nikkei tops 20,000, European shares hit 15-year high

By David Gaffen

NEW YORK (Reuters) – World equity markets tested record highs on Friday as hopes of more easy money from top central banks pushed Japan’s Nikkei index past 20,000 points for the first time in 15 years.

The dollar added to recent gains, moving it toward parity with the euro, boosted by favorable bond yields in the United States compared with Europe.

Wall Street was higher after industrial conglomerate General Electric Co (GE.N) said it would sell off its finance arm, helping boost the shares to their highest since December 2013. GE was up 8 percent to $ 27.81 a share.

The Dow Jones industrial average (.DJI) rose 54.46 points, or 0.3 percent, to 18,013.19, the S&P 500 (.SPX) gained 6.8 points, or 0.33 percent, to 2,097.98 and the Nasdaq Composite (.IXIC) added 8.50 points, or 0.17 percent, to 4,983.07.

Subdued Chinese inflation fueled talk of additional stimulus from Beijing and came after data this week from top economies such as the United States and Germany has generally bolstered the view that world growth is slowly perking up.

“We are in a honeymoon period for risk assets, and will be for another quarter,” said Sandra Crowl, an investment committee member at Paris-based asset managers Carmignac Gestion.

U.S. import prices slipped in March, with the year-on-year drop at 10.5 percent, the largest since September, due to falling oil prices and the strong dollar. It stands as another data point showing low inflation, arguing for the Federal Reserve to hold off on raising interest rates until the third quarter.

Ten-year U.S. Treasuries rose 5/32 in price, dropping the yield to 1.946 percent after a week of steady yield gains.

The dollar (.DXY) remained king. It was heading for its best week since 2011 against a basket of other top currencies as the euro (EUR=) limped to its worst since 2011 and sterling (GBP=) slumped to a five-year low after poor U.K. industrial production data.

Buoyed by gains in Asia and the latest slide in the euro, the pan-European FTSEurofirst 300 share index (.FTEU3) reached a 15-year high of over 1,640 as its ninth week of rises in the last 10 took it to its highest since 2000. [.EU]

Germany’s DAX (.GDAXI) also scored a record high [.EU] and Britain’s FTSE 100 (.FTSE), France’s CAC 40 (.FCHI) and the region’s other main indexes all made ground.

Along with the ECB’s stimulus program and the weak euro, news that Greece had made a 450 million-euro loan payment to the IMF and secured extra emergency funding from the ECB for its banks also helped the mood.

Brent (LCOc1) rose 1.7 percent to $ 57.53 a barrel and U.S. crude (CLc1) rose 1 percent to $ 51.30. Gold (XAU=) rose 1 percent to $ 1,1207.10 an ounce, down 1.3 percent so far this week.

Iron ore, key in industrial construction, tumbled another 4 percent in an ongoing rout as China has hinted at ongoing subsidies for its producers.

(Additional reporting by Marc Jones and John Geddie in London and Lisa Twaronite in Tokyo; Editing by Tom Heneghan and James Dalgleish)