NEW YORK, March 12 — A gauge of global stock markets climbed for a third straight session yesterday to hit its highest level in two weeks, as a dip in government bond yields helped curb inflation concerns and give a boost to equities.

Euro zone bond yields fell after the European Central Bank said it was ready to accelerate money-printing to keep a lid on euro zone borrowing costs, using its 1.85 trillion euro Pandemic Emergency Purchase Programme (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs.

Germany’s 10-year government bond yield was last at -0.333 per cent, after falling as far as -0.367 per cent, the lowest level since February 18 and further away from the near one-year high of -0.203 per cent in late February.

The yield on the benchmark 10-year Treasury note fell as low as 1.475 per cent, the first time it had dipped below 1.5 per cent in a week. It last fell 2/32 in price to yield 1.5266 per cent, from 1.52 per cent late on Wednesday.

On Wall Street, the easing inflation worry helped support equities, with the highly valued technology sector leading the way higher, up 2.12 per cent. Expensive stocks, many of which are in the tech sector, have been highly sensitive to the rise in yields.

In contrast, shares of bank stocks lost 0.47 per cent. Still, while the Dow and S&P 500 closed at record highs, the tech-heavy Nasdaq paced the gains, rising more than 2 per cent on the day.

"A lot of it depends on rates, a lot of it depends on that initial prick that started that transition from large cap tech to the rest of the market and small caps,” said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta.

"If rates continue to trend higher that trend will continue, if rates kind of stall out like they have over the next couple of days then we could have a back and forth that hopefully isn’t as volatile as it has been the last couple of days, but we should expect there is going to be a lot of action.”

The Dow Jones Industrial Average rose 188.57 points, or 0.58 per cent, to 32,485.59, the S&P 500 gained 40.46 points, or 1.04 per cent, to 3,939.27 and the Nasdaq Composite added 329.84 points, or 2.52 per cent, to 13,398.67.

Sentiment was also boosted by weekly jobless claims data, which pointed to a recovering US labour market as vaccine rollouts have helped lead to economic reopenings.

European stocks climbed, with the pan-European STOXX 600 higher for a fourth straight day, its longest winning streak in five weeks, with the index closing at its highest level since February 21, 2020. The STOXX 600 index rose 0.49 per cent and MSCI’s gauge of stocks across the globe gained 1.37 per cent.

An auction of 30-year US debt yesterday was viewed as slightly weak, but nowhere near the disappointing seven-year auction in late February that helped fuel inflation concerns and sent yields higher.

Analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening of the economy, but worries persist that additional stimulus in the form of a US$1.9 trillion (RM7.8 trillion) coronavirus relief package set to be signed by US President Joe Biden could overheat the economy.

The dollar was weaker for a third straight day coming off a 3-1/2-month high of 92.506 on Tuesday. The dollar index fell 0.48 per cent, with the euro up 0.52 per cent to US$1.1987.

Oil prices resumed their climb following two days of declines, buoyed by the brightening economic outlook and a decline in the dollar.

US crude settled up 2.5 per cent at US$66.02 per barrel and Brent was at US$69.63, up 2.6 per cent on the day. — Reuters