By David Randall

NEW YORK (Reuters) – Global equity benchmarks jumped and safe-haven currencies such as the U.S. dollar dipped on Tuesday as Janet Yellen used a confirmation hearing on her appointment as Treasury secretary to bolster the case for additional fiscal stimulus.

The move would aim to mend the economic damage inflicted by the coronavirus pandemic on the world’s largest economy.

Risk assets such as oil and emerging market stocks also rallied.

Yellen told the Senate Finance Committee that the government must “act big” with its next coronavirus relief package.

“A strong (stimulus) package would psychologically lift the mood of the investor and a good many consumers are going to go out and spend,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

MSCI’s gauge of stocks across the globe gained 0.83% following broad gains in Asia and slight losses in Europe.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% to a record high.

Data on Monday confirmed that China, the world’s second- largest economy, was one of the few to grow during 2020 and actually gathered pace as the year drew to a close.

On Wall Street, the Dow Jones Industrial Average rose 116.26 points, or 0.38%, to 30,930.52, the S&P 500 gained 30.66 points, or 0.81%, to 3,798.91 and the Nasdaq Composite added 198.68 points, or 1.53%, to 13,197.18.

Despite the risk-on mood on Tuesday, some dealers were wary before President-elect Joe Biden’s inauguration on Wednesday, fearing more far-right mob violence.

Wall Street is also bracing for tougher regulations now that the Democrats control the Senate, with Biden set to nominate two consumer champions to top financial agencies.

In foreign exchange markets, the U.S. dollar slipped from close to its highest in nearly a month as caution set in before Yellen’s testimony, where she reaffirmed a commitment to a market-determined exchange rate.

The dollar index fell 0.3%, with the euro up 0.41% to $1.2126 after touching a six-week low of $1.2052 in the previous session.

Benchmark 10-year Treasury notes last rose 3/32 in price to yield 1.0886%, from 1.097% late on Friday.

Spot gold added 0.1% to $1,838.70 an ounce..

Optimism that government stimulus will buoy global economic growth and oil demand lifted crude oil prices. U.S. crude rose 1.24% to $53.01 per barrel and Brent was at $55.84, up 1.99% on the day.

(Reporting by David Randall; additional reporting by Stephen Culp; Editing by Mark Heinrich, Steve Orlofsky, Jonathan Oatis and Dan Grebler)

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