Two major US stock indexes set fresh intraday record highs yesterday on investors’ rosy outlook for big banks’ second-quarter earnings, while European shares also rose and oil prices rebounded from the previous session’s bruising losses.
Expectations of more central bank stimulus have contributed to stocks’ gains in the past week. The view that the US economy is on solid footing, as well as reduced political uncertainty in Britain and Japan, have also buoyed stocks.
The benchmark S&P 500 hit 2,168.99, its fourth straight intraday record peak, while the Dow Jones industrial average hit 18,537.57 to mark its third straight intraday record high.
JPMorgan, the biggest US bank by assets, reported a quarterly revenue rise that beat estimates by a large margin, sending its shares up 2.4 per cent and boosting the S&P financial index one per cent.
The pan-European STOXX Europe 600 and the FTSEurofirst 300 index of top regional shares both reached their highest levels since Britain voted on June 23 to exit the European Union, with bank shares rallying, but trimmed gains after the Bank of England caught investors off guard by keeping interest rates unchanged.
Thursday’s gains in US and European shares helped push MSCI’s all-country world equity index to an eight-month high of 412.47.
The S&P 500 hit record closing highs over the past three days, while the Dow has ended at record highs over the past two sessions.
Safe-haven assets such as US Treasuries, gold, and the Japanese yen fell in value on the greater risk appetite
The MSCI world equity index was last up 0.67 per cent, at 412.03.
The Dow Jones industrial average was last up 148.33 points, or 0.81 per cent, at 18,520.45. The S&P 500 was up 13.83 points, or 0.64 per cent, at 2,166.26. The Nasdaq Composite was up 34.28 points, or 0.68 per cent, at 5,040.00.
Europe’s broad FTSEurofirst 300 index was last up 0.95 per cent, at 1,338.9.
Oil prices rallied more than two per cent as short covering lifted prices which were hammered on Wednesday by unusually weak US demand for motor fuel.
Brent crude was last up 2.49 per cent, at $47.41 a barrel. US crude was last up 2.3 per cent, at $45.76.
The dollar hit a nearly three-week high against the yen of 105.93 yen on the greater risk appetite, while sterling hit a two-week high of $1.3480 after the BoE decision.
Benchmark 10-year US Treasury yields hit a nearly three-week high of 1.551 per cent, partly on US data showing rising inflation. Bond yields move inversely to prices.
Spot gold prices were last down 0.92 per cent at $1,330.10 an ounce.