World equities move towards record highs

On Friday equities around the world edged towards record highs after U.S. President Joe Biden supported a bilateral Senate infrastructure agreement, boosting chances for an increased rebound in the world’s largest economy, and a tight supply outlook boosted oil.

Investors have been looking to an infrastructure deal to extend the U.S. recovery after enormous fiscal stimulus helped the U.S. economy grow at a 6.4% annualized rate in the first quarter. The plan is valued at $1.2 trillion over eight years, $579 billion of which is new spending.

MSCI’s all-country index gained 0.13%, close to a record high reached on June 15 and bringing gains for the week to more than 2%.

European stocks gained 0.1% towards record highs hit this month, after the S&P 500 increased by 0.58% and the Nasdaq Composite added 0.69%, lifting both indexes to record-high closes. The Dow Jones Industrial Average gained 0.95%. Germany’s DAX was stable and Britain’s FTSE index gained 0.14%.

Monetary and fiscal stimulus around the world in reaction to the COVID-19 pandemic is enhancing financial assets, notwithstanding an unequal pace of recovery between regions, said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management.

Oil prices gained for a third consecutive session, and were on track for a fifth successive weekly gain, as growth in demand is expected to exceed supply on bets that OPEC+ producers will be cautious in returning more output to the market from August. U.S. West Texas Intermediate crude gained 0.2% to $73.40 per barrel and global benchmark Brent crude was at $75.70, up 0.19% on the day.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose gained almost 1%, and Chinese blue chips rallied 1.63%. Hong Kong’s Hang Seng increased by 1.4%, Seoul’s Kospi was up 0.51% and Australian shares gained 0.45%. Japan’s Nikkei rose 0.66%. Spot gold was up 0.35% at $1,781.55 an ounce, on track for its first weekly rise in four.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.