World Stocks Monitoring New High on Growth Hopes; Oil Falls

World stocks edged higher while oil retreated on Thursday. Investors diverged over whether to bet on the U.S. economic recovery or worry about a surge in COVID-19 cases in India and others.

Vaccination rates were rising and pandemic-weary people were holding onto more freedom to drive growth in some major economies. MSCI’s broadest global gauge of stocks rose 0.3%. It was trading within 1% of its all-time closing high following a recent mini sell-off.

Europe’s top indexes posted stronger gains as the European Central Bank held a policy meeting. The broad STOXX Europe 600 added 0.5%, also helped by upbeat earnings from Nestle and Volvo.

This came after overnight gains in Asia, where Japan’s Nikkei 225 gained 2.4%. The MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%.

On Wall Street, U.S. stock futures pointed to a marginally lower open down only 0.1% from a record high.

On Thursday, Nasdaq Inc said it was launching options on the Nasdaq-100 Micro Index.  It’s a lower-cost way for retail investors to gain exposure to the popular Nasdaq 100 Index.

Over the past year, retail investors have entered the securities markets in droves as large retail brokers have dropped trading commissions. Coronavirus lockdowns forced people to work from home, and as “meme stocks,” like GameStop Corp and AMC Entertainment, soared in value in January.

Oil

While stocks were generally upbeat, oil fell after a resurgence of COVID-19 cases in India and Japan. Additionally, a recent surprise stock build in the United States, also weighed on sentiment.

U.S. crude futures retreated 0.5% at $61.04 per barrel and European benchmark Brent dropped 0.6% at $64.95.

On Thursday, the U.S. Treasury yields stayed depressed but moved off intraday lows, with the yield on benchmark 10-year notes at 1.5644%. 

Germany’s 10-year government bond yield also dipped and was last trading flat at -0.26%. It is the benchmark of the euro area. 

Currency markets

In forex, the dollar last traded flat, while the euro was up 0.1% at $1.205. The euro was not far from its strongest since March 3. 

Since the start of April, the common currency has gained as much as 3% against the dollar.

Not much change in the euro is expected from the ECB meeting. But traders will be looking out for good news about the state of the economy. Moreover,  any hints that its bond purchases could be tapered.

Slated next week are the U.S. Federal Reserve and Bank of Japan meetings.