NEW YORK, June 8 ― A gauge of global equity markets closed at a record high yesterday as technology shares took in stride a deal by the world's richest nations on a corporate tax aimed at US tech heavyweights, and oil prices jumped to a two-year high.
MSCI's all-country world equity index gained 0.1 per cent, marking its sixth record close in seven days, as stocks advanced on expectations of an economic rebound from the coronavirus pandemic.
Oil climbed above US$72 (RM297) a barrel, extending this year's rally built on rising recovery demand and supply curbs from the Organisation of the Petroleum Exporting Countries and its allies, before giving up the gains as investors took profits.
US Treasury and euro zone government bond yields edged up in largely subdued trade ahead of a European Central Bank meeting on Thursday, the same day highly-anticipated US inflation data will be released.
The 10-year US Treasury note rose 0.1 basis point to yield 1.5704 per cent, at the bottom of a two-month range.
Germany's 10-year Bund yield rose 0.2 basis point to -0.195 , near one-month lows hit after the US unemployment report on Friday. The data showed a solid pickup in hiring, but not enough to stir fears of an overheated economy that could lead to tighter US monetary policy via higher interest rates.
The big tech firms, in the crosshairs of the G7 agreement on Saturday that seeks a minimum global corporate tax rate of at least 15 per cent, can expect slightly more predictability in their future tax obligations, said Christopher Smart, chief global strategist at Barings.
A period of unilateral taxes and punitive tariffs from both the United States and European Union has been avoided for the moment, Smart added.
On the political front, the agenda of US President Joe Biden may struggle if he is unable to change the filibuster rule in the Senate, said Ed Moya, senior market analyst at OANDA in New York.
“We're getting lower volatility and that's leading to a very difficult market to trade or to get excited about,” Moya said of the rangebound equities market.
“The market is going to have to wait a few months to get some clarity on the labor market recovery and whether these pricing pressures will be persistent,” he said, referring to spiking US inflation likely to be seen on Thursday.
MSCI's ACWI index, a global benchmark for equity performance in 50 countries, closed at 717.00. The index is heavily weighted to the US tech behemoths, half of which rose while the others fell.
Microsoft Corp rose 1.2 per cent, Facebook Inc rose 1.9 per cent and Apple Inc eked out a 0.008 per cent gain after being in the red most of the day. Amazon.com Inc slipped 0.3 per cent.
On Wall Street, the Dow Jones Industrial Average fell 0.36 per cent, the S&P 500 lost 0.08 per cent and the Nasdaq Composite added 0.49 per cent.
In Europe, advancing automakers more than offset early declines in commodity-linked shares sparked by downbeat China export data.
Chinese copper imports fell 8 per cent in May from the previous month as record-high prices further eroded buying interest while overall export growth missed analysts' forecasts.
Three-month copper on the London Metal Exchange shed 0.3 per cent to US$9,925 a tonne.
The European automobiles and parts index rose 0.9 per cent to its highest level since March 2015, extending a 5.3 per cent rally from last week.
Euro zone banks were broadly higher as government yields were steady near one-month lows ahead of the ECB meeting on Thursday when policymakers are expected to stick to their dovish policy stance.
Europe's broad FTSEurofirst 300 index added 0.29 per cent to end at 1,747.17, a new record close. The continent-wide STOXX 600 index also set a new record close at 453.86.
Gold prices firmed as the dollar retreated, with the dollar index down 0.2 per cent while the euro was up slightly against the dollar, at US$1.2196. The Japanese yen strengthened 0.23 per cent versus the greenback at 109.26 per dollar.
US gold futures settled up 0.4 per cent at US$1,898.80 an ounce.
Crude has risen for the past two weeks, with Brent up 38 per cent this year and West Texas Intermediate, the US benchmark, rising 43 per cent.
Brent crude futures settled down 40 cents at US$71.49 a barrel. US crude futures fell 39 cents to settle at US$69.23 a barrel.
Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.08 per cent, while Japan's Nikkei edged up 0.3 per cent and touched its highest level in almost a month.
Taiwan stocks lost 0.4 per cent as a spike in Covid-19 cases hit three tech companies in northern Taiwan, including chip packager King Yuan Electronics. ― Reuters
