A global stocks rally extended its run in Asia Thursday on confidence the global economic expansion remains intact and continuing momentum in U.S. technology shares. Treasuries held losses, with 10-year yields just under 3 percent.
Equities gained from Tokyo to Sydney after the S&P 500 Index rose for a fourth consecutive day and the Nasdaq Composite Index chalked up another record high. European markets had come under pressure, with the region’s bonds sinking and stocks fluctuating on signs that the European Central Bank is ready to discuss an end to quantitative easing. Record American exports helped shrink the U.S. trade deficit in April, data showed Wednesday, underscoring forecasts for robust second-quarter growth. The dollar slipped, on course to fall for a third day out of four.
The return of risk appetite comes as investors get used to the on-again, off-again threat of protectionism. They’ll now look ahead to the Group of Seven meeting this week for further developments on the trade front, as well as to this month’s meetings of both the Federal Reserve and the ECB for more clues on monetary policy. ECB chief economist Peter Praet on Wednesday confirmed next week’s gathering will be pivotal for a decision on when to end its bond-buying program.
The renewed rally in global stocks has revived warnings in some quarters that investors are ignoring risks ranging from central banks’ shift to quantitative tightening to trade tensions and excess American borrowing.
“It’s the most insanely overpriced market since March 2000,” David Stockman, U.S. budget director in the Reagan administration, said on Bloomberg Television. He said stock buybacks have created an artificial support for U.S. equities.
Elsewhere, oil pared losses from a U.S. government report showing a surprise increase in domestic crude stockpiles. Indian assets will be in focus after the Reserve Bank of India raised its key rate for the first time since 2014.
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These are some key events to watch this week:
- On Thursday, Japanese Prime Minister Shinzo Abe meets with U.S. President Trump at the White House to discuss the planned U.S. summit with North Korea’s Kim Jong Un.
- Also on Thursday, euro-zone GDP.
- A Turkish rate decision is due on Thursday.
- G-7 Leaders’ Summit starts in Quebec Friday through to June 9.
These are the main moves in markets:
- The MSCI Asia Pacific Index rose 0.6 percent as of 11:19 a.m. Tokyo time.
- Topix index rose 0.6 percent.
- Hong Kong’s Hang Seng Index rose 0.8 percent.
- Kospi index climbed 0.8 percent.
- Australia’s S&P/ASX 200 Index jumped 0.7 percent.
- Futures on the S&P 500 Index fell 0.1 percent.
- The Bloomberg Dollar Spot Index fell 0.1 percent.
- The Japanese yen gained 0.2 percent to 109.99 per dollar.
- The euro rose 0.1 percent to $1.1791.
- The yield on 10-year Treasuries rose less than one basis point to 2.97 percent.
- Australia’s 10-year yield jumped seven basis points to 2.836 percent.
- West Texas Intermediate crude rose 0.3 percent to $64.95 a barrel.
- Gold rose less than 0.05 percent to $1,296.89 an ounce.
- LME copper rose 0.7 percent to $7,271.00 per metric ton.