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GLOBAL MARKETS: Stock markets remain at record levels as inflation fears subside

Por Kevin Buckland

Apr 9 (Reuters) – Global stocks held steady around record highs on Friday as easing inflation fears in the United States pushed bond yields down and improved results on Wall Street, though Weak Chinese stocks limited gains in Asia.

The MSCI World Stock Index hit an all-time high at the beginning of the Asian session before coming close to flat.

The Japanese Topix was up 0.6% and Australian stocks were approaching a more than a year high, while the South Korean Kospi hit the highest intraday level since mid-February.

Chinese stocks were the exception, with a 1.5% drop for the CSI 300, which pushed the MSCI Asia-Pacific stock index 0.6% down – which excludes Japan. , as the good data on national inflation increased concerns about the tightening of the monetary strategy.

10-year Treasury yields held near Thursday’s two-week low of about 1.6%, something that during the day had boosted US tech stocks, bringing the S&P 500 to a close at record levels.

By the end of March, yields had risen to their highest level since January last year, 1,776%, as a series of positive US economic data fueled fears of a spike in inflation that could force the Federal Reserve. to raise interest rates earlier than the leaders had anticipated so far.

However, an unexpected increase in the number of Americans filing new jobless claims, along with confirmation Thursday by Fed Chairman Jerome Powell that inflation is not a concern, helped to calm those fears.

“Markets seem to have taken some comfort in seeing that concerns about inflation and thus higher interest rates may have been exaggerated,” said Michael McCarthy, chief market strategist at CMC Markets .

“Right now, there is no question that the sentiment is extremely positive, and I am not going to get in the way of this train.”

Powell pointed out at an International Monetary Fund event that the central bank is far from determined to reduce support for the US economy, and said that while reopening the economy could temporarily lead to higher prices, it will not mean a phenomenon of inflation.

Helped by the decline in returns, investors turned to mega-cap tech stocks like Apple Inc, Microsoft Corp and Amazon.com Inc, which were the main drivers of the S&P 500.

The S&P 500 gained 0.42% to hit an all-time high, while the Nasdaq Composite added 1.03%. Emini futures were mostly flat.

In China, official data on Friday shows that ex-works prices have risen in March at their fastest annual rate since July 2018, adding to investors’ concerns that the authorities may move towards a more restrictive strategy. .

“Basically, the market thinks there is more chance that the People’s Bank of China will tighten its strategy rather than relax it,” said Masahiko Loo, a Tokyo-based portfolio manager at AllianceBernstein.

“It is very different from the position of the Fed or the Bank of Japan, where they are accommodating.”

Meanwhile, the US dollar index, which tracks the greenback against six rivals, was hovering near Thursday’s two-week low of below 92, weighed down by weak Treasury yields.

Spot gold was down about $ 1,750 an ounce, after hitting a more than a month high of $ 1,758.45 on Thursday.

Oil prices barely changed, as rising Wall Street and a weak dollar offset concerns about the large increase in gasoline stocks in the United States.

US crude was largely unchanged at $ 59.57 a barrel, while Brent fell slightly at $ 63.04 a barrel.

(Information from Kevin Buckland in Tokyo; additional information from Chibuike Oguh in New York; edited by Christopher Cushing and Kim Coghill; translated by Flora Gómez in the Gdansk newsroom)

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