Financial markets kicked off 2010 on an upbeat note on Monday with world stocks close to 15-month highs on hopes for a sustainable economic recovery.
The dollar was slightly weaker against a basket of major currencies while government bonds sold off.
MSCI's all-country world stock index was up nearly half a percent, slightly below 2009 highs but around where they were in October 2008 just after the Lehman Brothers collapse.
Other indexes are beyond that mark, with MSCI's emerging market benchmark and its Asian Pacific stocks ex-Japan gauge both at 17-month highs.
Investors were essentially adding to last year's bets that the global economy will improve and that riskier assets such as stocks were oversold when fears of a banking meltdown swept the market.
Data on Monday showed eurozone manufacturing improving in December from a month earlier to a 21-month high.
MSCI' main index gained 31.52 percent last year, the Asian one 68.32 percent and the emerging market benchmark 74.5 percent.
“There is generally a feeling of modest optimism at the start of the year. We are looking forward generally to a year of positive growth in most countries and good profits growth for most companies,” said Andrew Milligan, head of global strategy at Standard Life Investment.
He added, however, that investors would need to be selective.
European and Japanese shares were up strongly on the first trading session of the year.
The FTSEurofirst 300 index of leading European shares was up 0.7 percent after gaining 25.7 percent last year while the Nikkei closed up 1 percent, adding to 2009 gains of 19.04 percent.
The dollar fell back from early gains, coming off an earlier four-month high against the yen, with the euro getting some support from the euro zone manufacturing data.
Currency investors were focused on U.S. data this week, starting with Monday's ISM manufacturing survey and culminating in Friday's key US monthly jobs data, which could give further reason to believe the US is on the road to recovery.
“Any strength will help support the dollar,” BNP Paribas currency strategist Ian Stannard said.
The dollar was down 0.1 percent against major competitors and against the yen. The euro gained 0.2 percent to $1.4341.
Eurozone government bonds sold off. The 10-year yield was 3.42 percent, up three basis points and the two-year was 1.405 percent, up five basis points.