World stocks hit record highs driven by Wall Street

LONDON (Reuters) – Global stocks hit record highs on Friday as tech stocks on Wall Street cheered on declining fears of US inflation, with lack of inflationary pressures keeping bond yields at a two-week low.

Federal Reserve Chairman Jerome Powell reiterated late Thursday that inflation was not an issue, following data showing an unexpected rise in the number of Americans filing new claims for unemployment benefits.

MSCI’s broadest gauge of world equities hit a record high in Asian trading, although it fell 0.1% at 0755 GMT. The index is up more than 1.5% this week.

“As long as monetary stimulus is easy, as long as fiscal policy is easy, any hiccups in stocks are likely to find buyers only,” said Giles Coghlan, HYCM’s chief currency analyst.

Emini futures were stable after the S&P 500 rose 0.42% to a record high and the Nasdaq Composite added 1.03%.

The UK’s FTSE 100 hit its highest level in more than a year, bringing the weekly gain to nearly 3%, aided by the rapid rollout of vaccines in the country. [.L]

German stocks fell 0.22%.

Powell indicated at an IMF event that the central bank was nowhere near diminishing support for the US economy, saying that while economic reopening could temporarily result in higher prices, this will not be inflation.

Deutsche Bank analysts said the comments “provided new reassurance to investors who had begun pricing in past rate hikes based on some very strong economic data from recent weeks.”

Traders piled into megacap technology stocks such as Apple Inc, Microsoft Corp and Amazon.com Inc, which were the main drivers of the S&P 500.

Benchmark yields on 10-year Treasury bonds remained close to Thursday’s biweekly low near 1.6%.

Yields had risen to their highest since January 2020 of 1.776% at the end of March after a string of strong US economic data sparked fears of an inflation spike that could force the Federal Reserve to raise interest rates earlier than policymakers had so far signaled.

Germany’s 10-year yield rose 2 basis points, away from the 10-day lows of the previous session.

The US dollar index rose 0.2%, but faced the worst week of the year, weighed down by lower government bond yields. The euro fell 0.2% after hitting its two-week high in the previous session. (Image: dollar set for worst week of the year,)

The CBOE volatility index hit its lowest level since February 2020 at 16.55.

In Asia, Japan’s Topix gained 0.6% and Australian stocks floated near their 13-month high, while South Korea’s Kospi hit its highest intraday level since mid-February.

However, Chinese equities fell 1.5% as robust domestic inflation data raised concerns about policy tightening.

Factory gate prices have risen at the highest annual rate since July 2018 in March.

Oil prices fell as investors weighed up the rising inventories of major producers and the impact on fuel demand of the COVID-19 pandemic.

US crude oil fell 0.35% to $ 59.38 a barrel, while Brent lost 0.5% to $ 62.87 a barrel.

Spot gold fell 0.5% to $ 1,747 an ounce after jumping to an over-month high of $ 1,758 on Thursday.