World stocks set fresh record high on strong China, US data

Global stocks hit a record high on Friday and oil climbed after strong US and Chinese economic data bolstered expectations of a solid global recovery from the coronavirus-induced slump.

Government stimulus, a string of strong corporate earnings releases and signs of economic recovery in countries ahead in the Covid-19 vaccination race have all helped push stock markets onto new heights in recent days.

"As the economic re-opening accelerates in the coming months, we believe the bull market remains on a solid footing," said Mark Haefele, chief investment officer, UBS Global Wealth Management. MSCI's broadest gauge of world stocks edged higher in early European trade, up 0.2 per cent to a record high. Europe's top indexes all opened higher, led by Britain's FTSE 100, up 0.5 per cent and passing 7,000 points for the first time since February 2020. "As the global recovery becomes more entrenched, fuelled by continued fiscal stimulus and ultra-loose monetary policy, we think this should translate into continued positive UK equity market performance," said Nick Peters, multi asset portfolio manager, Fidelity International.

US stock futures pointed to a mixed open on Wall Street, with those for the S&P 500 up 0.1 per cent and Nasdaq futures down 0.1 per cent. Overnight, Asian markets had tracked a path similar to Europe's. MSCI's broadest index of Asia-Pacific shares outside Japan was last up 0.5 per cent, with Shanghai shares adding 0.8 per cent and Japan's Nikkei up 0.1 per cent.

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Driving the move was Chinese data showing record 18.3 per cent growth in the first quarter, though the reading slightly undershot expectations. Retail sales bounced strongly last month. "We remain focused on a China-led rebound steadily helping the Asia-Pacific region," said Sebastien Galy, senior macro strategist at Nordea Asset Management.

"As the US economy and then European economies open up, it should further help Asian exports. This should support Emerging Market and APAC equities as well as China equities and fixed income." Despite the punchy GDP number, gains were tempered by the view that Beijing will act to rein in the brisk expansion later in the year to stop the economy overheating. The strong Chinese data had followed similarly upbeat numbers out of the United States overnight. Retail sales rebounded 9.8 per cent in March, pushing the level of sales 17.1 per cent above its pre-pandemic level to a record high. The brightening economic prospects were underscored by other data, including first-time claims for unemployment benefits, which tumbled last week to the lowest level since March 2020. - Reuters