Stocks gain as European shares hit new highs, dollar slips By Herbert Lash and Marc Jones NEW YORK/LONDON (Reuters) – World stocks edged higher on Thursday, helped by surging European stocks and a larger-than-expected rise in U.S. weekly jobless claims that buoyed interest rate cut hopes, while the dollar eased as the market awaits key […]
Stocks gain as European shares hit new highs, dollar slips
By Herbert Lash and Marc Jones
NEW YORK/LONDON (Reuters) – World stocks edged higher on Thursday, helped by surging European stocks and a larger-than-expected rise in U.S. weekly jobless claims that buoyed interest rate cut hopes, while the dollar eased as the market awaits key inflation data next week.
The pan-European STOXX 600 and Britain’s FTSE 100 scaled fresh record highs, last up 0.24% and 0.36% respectively after the Bank of England kept rates unchanged.
But investors cheered indications more policymakers are warming to cutting rates soon. Two of BoE ’s nine rate setters , one more than in April, voted for a cut and Governor Andrew Bailey said more could be on the way than investors expect.
The BoE sent a message that bets on the first cut being in August might be too conservative as it lowered its inflation forecasts for two and three years’ time to 1.9% and 1.6% – below its 2% target – from its February projections of 2.3% and 1.9%.
In the United States, initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the Labor Department said.
“It’s a relatively quiet week, but initial jobless claims came in weaker. We’re still clearly in that ‘bad news is good news’ macro regime,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management in Boston. “We’ll have to see if that’s the beginning of a trend. That is one of the biggest jumps we’ve seen in quite a while.”
MSCI’s gauge of stocks across the globe rose 0.30%. On Wall Street, the Dow Jones Industrial Average rose 0.46%, the S&P 500 gained 0.35% and the Nasdaq Composite gained 0.27%.
The dollar index, a measure of the U.S. currency against a basket of six others, including the yen and the euro, fell 0.22% to 105.28. The euro rose 0.29% to $1.0776 and the yen weakened 0.01% to 155.58 per dollar.
Sterling rebounded to strengthen 0.11% at $1.2510.
Benchmark Treasury yields edged higher following a brief dip after the jobless claims data.
The yield on benchmark 10-year Treasury note rose 0.3 basis points to 4.487%, while the two-year note’s yield, which typically moves in step with interest rate expectations, fell 1.9 basis points to 4.8238%
BULLS IN THE CHINA SHOP
Overnight in Asia, Chinese trade data and some property market developments had helped Chinese stocks continue their recent outperformance. MSCI’s dollar-denominated China index has jumped more than 13% over the past two months.
Customs figures showed that China’s imports jumped 8.4% in April from a year earlier, beating expectations for a rise of 4.8%, while exports returned to growth, meeting forecasts, in a boost to economic growth.
That helped Chinese shares build on earlier gains, with blue-chip stocks ending up almost 1% and Hong Kong’s Hang Seng index increasing 1.2%. News that China’s eastern metropolis Hangzhou will lift all home purchase restrictions in the ailing property sector, a key pillar of domestic demand, also boosted sentiment.
Property shares surged 2.5% as a result.
In other markets, Japan’s Nikkei reversed earlier gains to finish down 0.3%. Australia’s resources-heavy share market lost 1.1% while South Korea also retreated 1.2%.
(Reporting by Marc Jones; editing by David Evans and Will Dunham)
