World share markets rose yesterday, supported by hopes diplomatic efforts would cool the crisis in Ukraine, while the euro advanced to its highest level of the year after the European Central Bank signalled its economy needs no additional stimulus.
The latest developments in Ukraine, while still worrisome, have not caused investors to back away from stocks and risky investments on a global scale, as occurred on Monday.
MSCI’s world equity index, which tracks shares in 45 countries, was up 0.6 per cent, and the MSCI emerging market index rose 1.2 per cent.
European central bankers offset the geopolitical worries when, as expected, they left interest rates unchanged but offered no signal the ECB will implement unconventional measures such as bond purchases to avert the threat of excessively low inflation and underpin a fragile recovery. The Bank of England, also meeting yesterday, kept interest rates unchanged, seeking to give the economy more time to build momentum before removing stimulus.
The ECB’s show of restraint on monetary stimulus bolstered the euro, boosting it to $1.3852, the highest since late December, according to Reuters data.
European stocks were also supported by the ECB’s decision. The FTSEurofirst 300 index tracking Europe’s top shares was steady at 1,344.88.
“European stocks have been quite resilient in the face of the multiple shocks, from the Fed’s tapering to the Ukrainian crisis, even though risks seem limited,” Banque Leonardo strategist Francois Chevallier said.
On Wall Street, the Dow Jones industrial average gained 82.04 points, or 0.50 per cent, at 16,442.22.
The Standard & Poor’s 500 Index was up 7.15 points, or 0.38 per cent, at 1,880.96. The Nasdaq Composite Index was up 7.17 points, or 0.16 per cent, at 4,365.14.
Due to the resilience in stock prices, investors further pared their holdings in less-risky US and German government bonds. The yield on US 10-year Treasuries rose four basis points to 2.74 per cent, while the yield on 10-year Bunds gained 5 basis points to 1.65 per cent.
In the oil market, Brent crude was off 18 cents, or 0.17 per cent, at $107.57 a barrel. US crude was last down $0.31, or down 0.31 per cent, at $101.14 per barrel.
Gold traded in a right range with investors awaiting cues from today’s US jobs data and developments in Ukraine. It rose $7.89 or 0.59 per cent, to $1,344.90 an ounce.