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Stocks climb as big tech back in focus; dollar slips

Dubai - The ECB kept its deposit rate unchanged at -0.5 per cent and maintained the overall quota for bond purchases at €1.85 trillion .



The three major indexes on Wall Street trended higher in early trade, though declining shares outnumbered gainers by a 1.5-to-1 ratio. — Reuters
The three major indexes on Wall Street trended higher in early trade, though declining shares outnumbered gainers by a 1.5-to-1 ratio. — Reuters

Published: Thu 21 Jan 2021, 10:49 PM

Last updated: Thu 21 Jan 2021, 10:50 PM

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

In Europe, the pan-European STOXX 600 index closed 0.17 higher, while the FTSE slid 0.4 and the DAX slipped 0.11 per cent.

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 further and MSCI’s global index of stock performance across 50 countries gained 0.3 per cent.

The three major indexes on Wall Street trended higher in early trade, though declining shares outnumbered gainers by a 1.5-to-1 ratio.

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 fell 35.59 points, or 0.11 per cent, to 31,152.79. The S&P 500 lost 1.32 points, or 0.03 per cent, to 3,850.53 and the Nasdaq Composite added 49.99 points, or 0.37 per cent, to 13,507.24.

The pan-European STOXX 600 index rose 0.16 per cent and MSCI’s gauge of stocks across the globe gained 0.1 per cent.

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

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

“Having a flat or slightly improved data point for the second week of January helps argue that the trend is not toward rising claims,” LeBas said.

Euro zone bond yields jumped to one-week highs, a move analysts attributed largely to the ECB saying it may not use the firepower of its bond purchasing program in full.

The ECB kept its deposit rate unchanged at -0.5 per cent and maintained the overall quota for bond purchases at 1.85 trillion euros, as expected.

The dollar index fell 0.265 per cent, with the euro up 0.38 per cent to $1.215, amid expectations of a Biden stimulus push and after the Bank of Japan left its policies unchanged overnight.

The benchmark 10-year Treasury note fell almost 1 basis point to push its yield up to 1.099 per cent.

In commodity markets, oil prices eased on an unexpected rise in U.S. crude stockpiles, though hopes for an economic revival kept losses in check.

U.S. crude fell 0.21 per cent to $53.20 per barrel and Brent was down 0.12 per cent at $56.01 a barrel.

Industrial metals such as copper, nickel and iron ore all rose, while spot gold slid 0.4 per cent to $1,864.04 per ounce. — Reuters


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