MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.74 percent. In 2017 the index set scores of record highs and rose by one-fifth in value.
Major stock indexes closed 2017 with their best performance since 2013. In the U.S. market, the advance came amid strong economic growth and corporate earnings, low interest rates and hopes, now realized, of U.S. corporate tax cuts.
U.S. equity indexes closed higher on Tuesday, buoyed by gains in technology and consumer discretionary stocks.
The Dow Jones Industrial Average <.DJI> rose 104.79 points, or 0.42 percent, to 24,824.01, the S&P 500 <.SPX> gained 22.18 points, or 0.83 percent, to 2,695.79, and the Nasdaq Composite <.IXIC> added 103.51 points, or 1.5 percent, to 7,006.90.
"We're off to the races once again," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
"I don't expect the kind of moves we saw last year," he said. "But as long as monetary policy stays the way it is ... my view is stocks are going to have a decent year. And fiscal policy has become stimulative as well given the tax bill."
In Europe, equities closed lower, weighed by a decline in autos stocks following weaker car registrations data. Trading was also cautious ahead of the launch of a major reform of European financial markets.
The pan-European STOXX 600 <.STOXX> index fell 0.21 percent, and euro zone stocks <.STOXXE> shed 0.19 percent.
Shares rose in Asia. Shanghai blue chips <.CSI300> climbed 1.41 percent and MSCI's 24-country emerging market stock index <.MSCIEF> jumped to a multi-year high after the Caixin index of Chinese industry rose to a four-month high of 51.5 in December, confounding forecasts for a decline. The 50-mark divides expansion from contraction.
FALLING DOLLAR
The dollar index <.DXY>, which tracks the greenback against a basket of major currencies, fell 0.29 percent, hampered by expectations of a slower pace of interest rate increases by the Federal Reserve amid a tepid U.S. inflation picture.
The dollar hit a three-month low <.DXY> on Friday, bringing its losses for 2017 to 9.8 percent, its worst performance since 2003.
Other currencies gained. The euro
The Japanese yen strengthened 0.32 percent at 112.29 per dollar, while sterling
U.S. Treasury yields rose in line with European government yields. A European Central Bank official said the ECB's massive bond purchase program might not continue later this year.
A reversal of year-end buying has also driven U.S. Treasury yields higher, said Brian Rehling, co-head of global fixed income strategy for Wells Fargo Investment Institute in St. Louis.
"Lots of institutions buy Treasuries to hold over year-end for liquidity. To see that reversal early in the year is not a surprise," Rehling said.
Benchmark U.S. 10-year notes
The 30-year bond
Oil prices earlier enjoyed their strongest start to a year since 2014 but fell lower as major pipelines in Libya and Britain's North Sea restarted and U.S. production soared to the highest level in more than four decades.
U.S. crude
Copper
Spot gold
(Additional reporting by Marc Jones, Dmitry Zhdannikov and Helen Reid in London, Henning Gloystein in Singapore, Sruthi Shankar in Bengaluru, and Caroline Valetkevitch, Richard Leong, Gertrude Chavez-Dreyfuss in New York; Editing by Nick Zieminski and Leslie Adler)
By Stephanie Kelly