London stocks kick off 2017 with record high

World stock markets mostly rose Tuesday, with London reaching a new high in its first session of 2017 and Wall Street resuming its push towards the 20,000 level.

Oil prices also powered ahead, before succumbing to profit-taking, while the dollar strengthened against its major peers.

"The New Year has started with a bang, at least in the case of the dollar, stocks and crude oil," said Fawad Razaqzada, an analyst at Forex.com.

London's FTSE 100 reached a historic peak at 7,205.21 points, extending a record run seen in the final week of 2016, before easing back from its highs, but still managed a closing record.

"2017 has kicked off in fine style for the FTSE 100," said Joshua Mahony, market analyst at IG trading group.

The FTSE remained in positive territory until the close after a survey showed UK manufacturing hitting a 30-month high in December.

The Markit/CIPS manufacturing purchasing managers' index (PMI) climbed to 56.1 in December after easing to 53.6 in November.

It "provides further evidence that the sector's post-referendum weakness will prove short-lived", said Capital Economics analyst Ruth Gregory.

Since Britain's vote in favour of Brexit, London's FTSE 100 blue-chip index has soared thanks in large part to a weaker pound, even as the economy appears to have shrugged off the impact of the impending divorce from the European Union.

- Inflation picks up -

The Paris CAC 40 meanwhile struck a 13-month intraday high above 4,900 points after data showed a slight pick-up in French inflation in December.

German inflation also rose, reaching its highest point in over three years. Analysts said the spike was mostly energy-related, but said it is also a sign of underlying strength in the eurozone's biggest economy.

On the Frankfurt exchange, financials rose on hopes that this may contribute to the European Central Bank phasing out its ultra-low rate monetary policy stance which has been hurting banks' margins.

Industrial stocks, however, ran into profit-taking after Monday's strong run, pushing the DAX index into slightly weaker territory.

Elsewhere Tuesday, most Asian markets were higher on their first trading day of the year.

Chinese stocks finished solidly higher after an independent research firm showed manufacturing activity expanded in December at its quickest pace in nearly four years, a sign of improving health for the world's second-largest economy.

Markets in Japan were closed for the final day of an extended New Year holiday.

- Dollar up -

On currency markets, the dollar advanced and was projected to continue its climb over the longer term, on expectations of more US interest rate rises this year and Donald Trump's inauguration as US president.

"The US dollar should remain strong in 2017. Growth and inflation in the US will be the strongest amongst the G3 economies (US, Japan and the EU)," Singapore's DBS Bank said in a note.

"We expect the Fed to hike four times this year whilst the eurozone and Japan maintain their quantitative easing (stimulus) policies," it added.

Also Tuesday, oil prices struck fresh 18-month highs as an agreement by major producers to cut output took effect, but ended the European day lower as investors locked into profits.

OPEC members led by Saudi Arabia and non-OPEC producers like Russia agreed late last year to slash output to try to shore up prices weighed down by an oversupply since mid-2014.

On Tuesday, OPEC member Oman said it had started implementing the accord, reducing its output by 45,000 barrels per day, which corresponds to about five percent of its total production.

Major OPEC producers have not provided any detailed output cut figures so far.

- Key figures around 1640 GMT -

London - FTSE 100: UP 0.5 percent at 7,177.89 points (close)

Frankfurt - DAX 30: DOWN 0.1 percent at 11,584.24 (close)

Paris - CAC 40: UP 0.4 percent at 4,899.33 (close)

EURO STOXX 50: UP 0.2 percent at 3,315.02

New York - Dow: UP 0.2 percent at 19,802.20

Hong Kong - Hang Seng: UP 0.6 percent at 22,126 (close)

Shanghai - Composite: UP 1.0 percent at 3,135.92 (close)

Tokyo - Nikkei 225: DOWN 0.2 percent at 19,114.37 (Friday's close)

Euro/dollar: DOWN at $1.0402 from $1.0487

Dollar/yen: UP at 118.08 yen from 117.43 yen

Pound/dollar: DOWN at $1.2254 from $1.2326

Oil - West Texas Intermediate: DOWN $0.55 at $53.17 per barrel

Oil - Brent North Sea: DOWN $0.83 at $55.99 per barrel