World stocks rise following their slowest quarter in a year

by Jonathan Adams
World stocks rise

The Stoxx 600 index rose 0.7 per cent at 432.22 points, and the Dax jumped 0.7 per cent to reach an all-time high

World stocks rose on Thursday following their slowest quarter in a year, as US economic strength offset the return to strict Covid-19 lockdown measures in parts of Europe and elsewhere. US president Joe Biden’s $2.3 trillion plan to rebuild America’s crumbling infrastructure lifted MSCI’s 50-country world index for a second consecutive day, while oil climbed 1.5 per cent before an Opec meeting expected to keep supply tight.

The euro changed hands at $1.1740, after hitting a near five-month low of $1.1704. Against sterling, the common currency was flat after reaching a 13-month low of 85 pence per euro.

European stocks ended just short of a record high on Thursday as strong factory activity data out of the euro zone and optimism around a new US government spending plan eclipsed concerns about another lockdown in France.

The pan-European Stoxx 600 index rose 0.7 per cent at 432.22 points, nearly a point away from its all-time high. The German Dax jumped 0.7 per cent to reach an all-time high.

A synchronised global recovery is expected to come through pretty strongly as we go through unlocking Europe in the next few months, said Jonathan Stubbs, equity strategist at Berenberg. The earnings recovery story looks pretty well underpinned.

Chip stocks including ASML, Infineon Technologies and BE Semiconductor all advanced between 1.2 per cent and 3.6 per cent after US chipmaker Micron Technology issued an upbeat revenue forecast.

Catering companies Sodexo and Elior dropped even as Sodexo forecast an expansion of second-half revenue after reporting a large beat on its first-half profit margin.

Swiss lender Credit Suisse gained 2.6 per cent, but was on track for its worst week since March 2020 on worries about the fall-out from Archegos Capital’s dramatic meltdown.

In the UK, shares finished higher on Thursday ahead of a long weekend, as hopes of a swifter economic rebound this year boosted sentiment.

The blue-chip FTSE 100 index finished 0.4 per cent higher, with industrials and consumer discretionary stocks, mainly Ferguson, Melrose Industries, Aer Lingus-owner International Consolidated Airlines Group, Compass Group leading the gains.

Bank stocks, including Prudential Financial, Barclays and Lloyds Banking Group were also among the biggest boosts on the index.

The FTSE 100 has advanced 4.3 per cent so far this year, supported by speedy vaccine rollouts and a raft of economic stimulus. But a recent spike in virus cases across Europe has made investors cautious.

The domestically focused mid-cap FTSE 250 index jumped 1 per cent, led by industrials and consumer discretionary stocks. Fashion retailer Next advanced 3.2 per cent, even after it reported a halving in annual pretax profit as lockdowns closed its stores but raised its forecast for a big rebound this year.

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