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World stock markets hit record highs

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Asian stocks touched new peaks, Wall Street reached new highs, and MSCI’s global index added 0.28%

World stock markets racked up record highs on Thursday and the dollar fell as investors bet major stimulus from new U.S. President Joe Biden and unswerving global central bank support would cushion the coronavirus’ damage and bolster growth.

The euro edged up as the European Central Bank’s first policy meeting of the year brought no change to its supportive policies.

Asian stocks reached new highs overnight, Wall Street rose to touch new peaks and MSCI’s global index of stock performance in 50 countries gained 0.28%.

But European stocks lost steam at the close, weighed down by oil and real estate shares, while the ECB warned a surge in COVID-19 infections posed a risk to the euro zone’s recovery.

The pan-European STOXX 600 stock index ended flat after rising as much as 0.8% earlier in the session.

Energy majors BP, Royal Dutch Shell and Total each fell more than 2% as oil prices slipped after data showed a surprise increase in U.S. crude inventories.

The three major indexes on Wall Street trended higher in early trade, though declining shares slightly outnumbered gainers. The S&P 500 posted 21 new 52-week highs and the Nasdaq Composite recorded 188 new highs.

This year’s early trend of investors piling into cyclical stocks has reverted to buying of large-cap growth stocks that led last year’s rally post-pandemic, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

It’s a reverse of what’s happened year-to-date through Tuesday. Today and yesterday were decidedly a growth market, especially big-cap tech plus, Ghriskey said. There’s concern about distribution of the vaccine.

The Dow Jones Industrial Average rose 0.17%, the S&P 500 gained 0.22% and the Nasdaq Composite added 0.65%.

Treasury yields were mostly higher and the yield curve steepened after U.S. labour market data showed new claims for jobless benefits, while elevated, declined modestly last week.

The data eased concerns that the U.S. labour market could deteriorate further, said Guy LeBas, chief fixed income strategist at Janney Capital Management in Philadelphia.

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