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London - World shares were testing a five-year high on Monday as a strengthening of Japanese Prime Minister Shinzo Abe's grip on power in weekend elections were seen as a boost for his radical stimulus policies.
European stocks saw a steady start to the week, dipping 0.1% as upbeat results from Philips and Julius Baer helped offset the temptation to book profits on the 9% gain the FTSEurofirst 300 index has made since June.
A 0.5 rise in Japanese stocks had lifted Asia's markets overnight after Abe's big Upper House election win, though a rebound in the yen prompted some profit taking on the Nikkei cutting its early gains in half.
The rise left MSCI's world share index within touching distance of the five-year high it hit at the end of May. It added to the recent gains built on generally strong company earnings and reassurances of central bank support.
"We are seeing a bit of position adjustment today but we have got a general positive outlook and I don't think the trend is going to break," said Societe Generale strategist Kit Juckes.
