Equities in key world markets edged higher yesterday, supported by an advance in US crude to trade above $50 per barrel for the first time in three weeks, while stocks on Wall Street also got a lift from growth data.
The euro slipped after data showed easing inflation in Spain and Germany, paring back bets on tighter policy from the European Central Bank.
Oil prices rose after Kuwait gave its backing for an extension of Opec production cuts in an attempt to reduce global oversupply.
“There is a significant chance that a short-to-medium-term bottom has been found,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
US crude last rose 1.6 per cent to $50.30 a barrel and Brent traded at $52.92, up 1.0 per cent on the day.
Banks and energy led US stocks higher as oil prices rose and gross domestic product increased at a 2.1 per cent annualised rate instead of the previously reported 1.9 per cent pace. Growth in consumer spending, which accounts for more than two-thirds of US economic activity, was revised up.
Much of the move in US stocks, which drove them to record highs earlier this month, is predicated on the Trump administration’s commitment to return to a four per cent economic growth.
Failure last week to pass a major campaign promise to revamp US healthcare called into question Mr Trump’s ability to deliver a tax reform even if his party controls the two chambers of Congress.
The Dow Jones Industrial Average rose 56.07 points, or 0.27 per cent, to 20,715.39, the S&P 500 gained 5.4 points, or 0.23 per cent, to 2,366.53 and the Nasdaq Composite added 6.08 points, or 0.1 per cent, to 5,903.63.
The benchmark S&P 500 index was at its highest in seven sessions.
The pan-European FTSEurofirst 300 index rose 0.47 per cent, underpinned by a rise in oil stocks. MSCI’s gauge of stocks across the globe rose 0.08 per cent.
Emerging market stocks fell 0.21 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed less than 0.1 per cent lower while Japan’s Nikkei dropped 0.8 per cent.
The dollar index ticked up 0.14 per cent with the euro down 0.39 per cent to $1.0724, weakened by the inflation data.
The soft inflation numbers compounded a Reuters report on Wednesday citing sources close to the ECB who said officials there were unhappy with a shift in market expectations toward tighter monetary policy and higher euro zone interest rates.
Sterling bounced from a one-week low of $1.2375 hit Wednesday and was last trading at $1.2489, up 0.46 per cent on the day.
Benchmark US Treasury yields rose slightly with support of the GDP data. Benchmark 10-year notes last fell 7/32 in price to yield 2.4125 per cent.
Spot gold fell 0.3 per cent to $1,247.96 an ounce. US gold futures fell 0.5 per cent to $1,247.40 an ounce.