World shares near record high on strong US economic data and earnings

Traders work at the New York Stock Exchange. World stocks held near a record high as strong US economic data, robust corporate earnings and the Federal Reserve's commitment to continue supporting the Show more

World stocks held near a record high as strong US economic data, robust corporate earnings and the Federal Reserve's commitment to continue supporting the economy fuelled investors' appetite for risk.

Asian stocks had less luck, with MSCI's ex-Japan index losing 0.6 per cent, following a softer-than-expected survey on China's manufacturing.

"China's economic recovery in January-March was strong but there are some doubts over whether you can take it at face value," said Wang Shenshen, senior strategist at Mizuho Securities.

Chinese tech giant shares listed in Hong Kong also buckled as Beijing summoned 13 internet platforms to order them to strengthen compliance with regulations, weighing on the Hang Seng index.

Mainland Chinese shares lost 0.25 per cent while Japan's Nikkei shed 0.7 per cent on position adjustments ahead of a long weekend. Both markets will be closed through Wednesday.

European stocks are expected to dip slightly, with euro Stoxx futures down 0.1 per cent and Britain's FTSE futures trading 0.2 per cent lower.

MSCI's broadest gauge of world stocks covering 50 markets, ACWI, however, was little changed and stood close to a record peak touched the previous day and up 5.1 per cent on the month.

On Wall Street, the S&P 500 also closed at an all-time high while the Nasdaq Composite hit a intraday record before paring some gains.

For both ACWI and S&P500, analysts are now expecting the earnings in the next 12 months to recover to above their pre-pandemic levels.

With just over a half of S&P500 companies reporting earnings, about 87 per cent beat market expectations, according to Refinitiv, the highest level in recent years.

Amazon was the latest to report stellar results late on Thursday, lifting its shares by 2.4 per cent in after-hours trade.

Data on Thursday showed US economic growth accelerated in the first quarter, fuelled by massive government aid to households and businesses.

New York City aims to "fully reopen" on July 1 after more than a year of closures and capacity restrictions, Mayor Bill de Blasio said, buttressing hopes for recovery in the battered service sector, an important source of employment.

That came against the backdrop of the Federal Reserve's reassurance on Wednesday that it is not time yet to begin discussing any change in its easy monetary policy.

The 10-year US Treasury yield rose to 1.690 per cent, its highest in more than two weeks, and last stood at 1.640 per cent.

"For now we are likely to see strong economic data from the US and that means we need to be wary of further rise in US bond yields, and the dollar/yen," said Toshiya Nakamura, chief manager of forex trading at Mitsubishi Trust Bank.

In the currency market, the yen was listless at 108.79 per dollar, having hit a two-week low of 109.22 as higher US bond yields helped the dollar.

The positive risk mood saw the euro extending its bull run to a two-month high of $1.2150 in the previous session and it last stood at $1.2115. With 3.3 per cent gains so far this month, it is on course for its biggest monthly rise in 9 months.

The Canadian dollar extended its gains to a three-year high of C$1.22715 per US unit, boosted by the Bank of Canada's tapering of its bond-buying programme and higher commodities including oil and lumber.

Oil prices took a breather after hitting six-week highs on strong US economic data.

Brent slipped 0.8 per cent to $68 per barrel, after having hit a high of $68.95 on Thursday while US West Texas Intermediate (WTI) eased 0.9 per cent to $64.41 per barrel.

"Strong US data is supporting the market. But on the other hand, given that oil producers have capacities to boost outputs further, there will be resistances around $65 for WTI and $70 for Brent," said Tatsufumi Okoshi, senior commodity strategist at Nomura Securities.