Stocks hit record high as Joe Biden, Covid-19 vaccine lift investor outlook

World shares rallied to a record peak on Wednesday following an overnight surge that saw the Dow Jones benchmark crack 30,000 for the first time as investors cheered a dramatically improved global outlook.

The formal start of US president-elect Joe Biden's transition to the White House and increasing confidence a Covid-19 vaccine would be ready soon ushered in renewed appetite for global shares.

After weeks of waiting, President Donald Trump's administration on Monday cleared the way for Biden to prepare for the start of his administration, giving him access to briefings and funding.

"The main thing now is that it has become official that the Biden administration will start. And we have ample liquidity from the world's central banks," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"I expect the honeymoon between financial markets and the Biden administration and stocks' bull trend could continue until around his inauguration in January," he said, though expects reality checks to follow his swearing in.

Reports that Biden planned to nominate former Federal Reserve Chair Janet Yellen as Treasury Secretary -- a move that could shift the focus heavily toward efforts to tackle growing economic inequality -- also cheered markets.

That pushed MSCI's broadest gauge of world stocks up 0.1% to a record level.

In Asia, Japan's Nikkei rallied 0.5% to a 29-year high while MSCI's index of Asia-Pacific shares outside Japan gave up early gains to trade down 0.2% as Chinese shares were capped by worries about rising debt defaults.

Euro Stoxx 50 futures of euro zone shares were little changed in early trade.

On Wall Street on Tuesday, the Dow Jones Industrial Average rose 1.54% to 30,046.24 while the S&P 500 gained 1.62% to 3,635.41, also a record high.

E-mini futures for the S&P 500 added 0.1% on Wednesday.

"Sentiment is running very hot as we come to the end of a cracker month for risk assets, so it does make you wonder whether the market is starting to exhibit signs of euphoria, and is due for a bit of a retracement in the short-term," said IG Australia markets analyst Kyle Rodda.

"But for all the risks the pandemic poses over the next few months... market participants appear happy to look through it all, and position for a post-pandemic world."

Investors bet forthcoming virus vaccine shots could ease the pain on various industries that have been hit hardest by the pandemic, from tourism to energy.

Global energy shares have risen almost 34% so far this month, on track for their best month on record.

In the foreign exchange market, risk-sensitive currencies held an upper hand against safe havens, including the US dollar.

The euro held firm at $1.1900, near the top of its recent trading range. The British pound stood at $1.3346, near Monday's two-month high, supported also by hopes of a Brexit deal.

Bitcoin gave up 1.4% to trade at $18,901, though it still stayed within sight of its record peak of $19,666 touched almost three years ago.

On the other hand, the yen, seen as a safe harbour currency, was little changed at 104.56 per dollar.

Gold has also lost lustre, hitting a four-month low of $1,800.80 on Tuesday and last stood at $1,806.10 per ounce.

US Treasuries were also pressured by expectations that Yellen's nomination as Treasury Secretary could ease the passage of a fiscal stimulus package, which would mean more debt.

The 10-year US yield rose to 0.880%, compared with Thursday's low of 0.818%.

Oil prices also held near highest levels since March on the improved global economic outlook.

Brent futures gained 0.5% to $48.20 per barrel, hitting a high last seen in early March.