World stocks climbed for a 10th straight day to hit new record highs on Thursday, as equity markets completed a remarkable six-week round trip from the heavy selloffs sparked by the United States’ and Israel’s attacks on Iran.
Optimism over a deal to end the war was continuing to grow, and with $95-a-barrel oil now well off the near $120 peaks of March, MSCI’s 47-country world stocks index (.MIWD00000PUS), advanced 0.25%.
It was its first all-time high since the hostilities erupted at the end of February, and with upbeat global bank earnings and rising tech stocks also lifting the S&P 500 (.SPX), above 7,000 points on Wednesday, Wall Street was eyeing more gains later.
“It almost looks like the perfect V-shaped recovery,” said Standard Chartered’s Chief Investment Officer for Africa, Middle East and Europe, Manpreet Gill. U.S. tech stocks and the easing of oil prices had been big drivers in the bounce, he added.
European stocks weren’t back to their pre-war highs yet, but they also moved 0.2% higher as traders in the bond markets continued to dial back bets of sharp interest rate increases by the region’s top central banks.
The European Central Bank published accounts showing its policymakers were wary of raising rates prematurely when they met last month when fears of an energy-driven surge in European and global inflation were mounting fast.
Gill said that if the spike in energy prices does now fade and the impact on inflation proves a temporary one-off, then rate setters are more likely to try to “look through” the move.
“I think what everyone’s going to be obviously quite cautious of is whether there are any second-round effects that we see that come later,” he said.
Back in oil markets, Brent crude remained choppy at just above $95 a barrel after a source briefed by Tehran told Reuters that Iran could consider allowing ships to sail freely through the Omani side of the Strait of Hormuz without risk of attack as part of its negotiations with the United States.
The U.S. dollar index (.DXY), which measures the greenback’s strength against a basket of six currencies, was around 0.15% stronger, after eight consecutive days of declines. /FRX
Aside from war watching, U.S. President Donald Trump has reignited his spat with Fed Chair Jerome Powell, threatening to fire him from his standalone seat on the U.S. central bank’s Board of Governors unless Powell vacates it when his term as Fed chief ends on May 15.
The dollar’s move also meant the euro at just under $1.18 lost traction, having edged to within touching distance of its highest level since the war began.
Japan’s yen held at 159 per dollar after the country’s finance minister said Tokyo and the U.S. had agreed to intensify communication on exchange rates following her meeting with U.S. Treasury Secretary Scott Bessent on Wednesday.
“As markets are pricing out the war premium, we could see the dollar coming under further pressure and resuming the downtrend that has been established since basically last year,” Khoon Goh, the head of Asia research at ANZ, said.
AUSSIE DOLLAR AND GOLD GAIN
Forecast-beating data from China showing that strong exports helped its giant economy grow 5.0% in the first quarter saw Chinese stocks rise over 1% and nudged the yuan to near a three-year high of 6.8152 per dollar in the offshore markets .
Japan’s Nikkei 225 jumped 2.4% to a fresh record, while Taiwan and Korea (.KOSPI), weren’t far behind as Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW), a linchpin of the AI sector, posted a 58% surge in its profits.
“We remain constructive overall” on emerging market stocks as “underlying profit growth is likely to be strong,” analysts from Goldman Sachs wrote in a research report.
Elsewhere, gold clawed back another 0.8% to $4,825.79 an ounce, Australian employment data lifted the Aussie dollar to a four-year high while bitcoin and ether stalled at just under $74,700 and $2,340 respectively in the cryptomarkets.
