Global stock prices posted record highs for a third straight session yesterday, propelled by an oil rally after a surprise drop in US crude inventories and comments by US Treasury Secretary Steven Mnuchin about pursuing significant tax reform.
The dollar was bogged down a day after minutes from the US Federal Reserve’s January 31-February 1 policy meeting showed the central bank was in no rush to raise interest rates.
Treasury and euro zone government bond yields declined as ECB policymakers also signalled they were not getting carried away by signs the euro zone economy is gathering strength.
This outlook for policy accommodation lifted gold prices to a three-month high near $1,250 an ounce.
Equity markets around the world have advanced this year as traders bet on tax cuts, less regulation and more infrastructure spending from US President Donald Trump and the Republican-controlled Congress to bolster the US economy.
Details on these stimulus programmes have been sparse, raising doubts whether bigger corporate profits will materialize.
Yesterday, Mr Mnuchin spoke of wanting to see “very significant” tax reform passed before Congress’ August recess and said the Trump administration was looking closely at border tax issues.
“That’s starting to put some details on tax reform. That’s reigniting some of the animal spirits,” said Bill Northey, chief investment officer for the private client group at US Bank in Helena, Montana.
The MSCI world equity index, which tracks shares in 46 nations, rose 0.48 points or 0.11 per cent, to 446.52 after touching a record peak at 447.67.
On Wall Street, the Dow booked an all-time intraday high for a 10th straight day, while S&P 500 touched a record high before retreating.
In morning trading, the Dow rose 22.48 points, or 0.11 per cent, to 20,798.08, the S&P 500 lost 1.81 points, or 0.08 per cent, to 2,361.01 and the Nasdaq Composite dropped 27.04 points, or 0.46 per cent, to 5,833.58.
Europe’s broad FTSEurofirst 300 index dipped 0.07 per cent at 1,471.82, scaling back further from its 14-month peak set on Wednesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.89 points or 0.19 per cent, to 471.69, after reaching its highest since July 2015 earlier in the day.
Gains in energy shares due to a jump in oil prices helped lift the equity market.
Brent crude was last up $1.18, or 2.11 per cent, at $57.02 a barrel. US crude was last up $1.09, or 2.03 per cent, at $54.68.
A weaker dollar in the wake of Fed minutes that were perceived as less hawkish whet appetite for gold and bonds.
The dollar index slipped 0.26 per cent at 100.95.
The benchmark 10-year Treasury yield was down over 2 basis points at 2.392 per cent after hitting a two-week low. German 10-year Bund yield decreased 2 basis points at 0.251 per cent, hovering at its lowest level since early January.
Spot gold prices rose $8.80 or 0.71 per cent, to $1,246.11 an ounce.