Global stocks climb to near record highs and oil rebounds as investors look past rising coronavirus infections

Global stocks climb to near record highs and oil rebounds as investors look past rising coronavirus infections
Stocks are so far staying resilient on Wall Street in the face of rising Delta variant infections.

  • Global stocks climbed to near record highs as investors’ concern about the Delta variant appeared to cool.
  • Oil prices rebounded after falling sharply on Monday, as jitters about future demand eased.
  • One analyst said markets are torn between enjoying rapid growth and worrying about coronavirus.
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Global stocks climbed on Tuesday to near record highs and oil prices rebounded as investors’ nerves over a surge in Delta-variant coronavirus infections appeared to ease.

The MSCI All-Country World Index, which includes stocks in both developed and emerging markets, rose 0.1% on Tuesday to 731.78, just off a record high reached last week.

On the US stock markets, S&P 500 futures were little changed after the benchmark index slipped 0.09% on Monday. Dow Jones futures and Nasdaq 100 futures were also roughly flat.

Europe’s continent-wide Stoxx 600 put on 0.2% in early trading after China’s CSI 300 climbed 1.16% overnight and other Asian indices broadly rose.

Elsewhere, markets gave off differing signals on Monday, with gold dropping sharply as investors bet the US Federal Reserve would raise interest rates sooner than previously expected in response to a strong economy.

Yet oil prices tumbled as traders reckoned that rapidly spreading coronavirus cases would slow the global economy’s recovery and lead to lower demand for energy.

Investors’ jitters appeared to cool on Tuesday, however, with oil prices rising sharply and spot gold inching higher after stabilizing on Monday.

Brent crude oil, the international benchmark price, climbed 1.72% to $70.24 on Tuesday in European trading. WTI crude, the US benchmark, was up 2.2% to $67.92.

Markets are “torn between two lovers, and feeling like a fool, with various asset classes choosing to go their own way,” said Jeffrey Halley, senior market analyst at trading platform Oanda.

On the one hand, the rapid spread of the Delta variant in the US and to a lesser extent in China is worrying investors, Halley said.

But on the other, advanced economies are growing rapidly. Data on Monday showed US job openings surged to a record high in June.

Strong economic data has helped push up US bond yields from recent lows. The key 10-year US Treasury yield, which moves inversely to the price, was marginally higher at 1.32% on Tuesday. The dollar index rose slightly to 92.97.

Elsewhere, bitcoin continued to trade at around its highest level since mid-May, gaining 1.1% to reach $45,971 on Tuesday.

JPMorgan analysts, led by Mislav Matejka, said in a note on Monday that they expect bond yields and stocks to soon start moving higher in tandem, as growth rates peak but economies continue to recover.

“[The] Delta variant is unlikely to result in the return to the strictest forms of restrictions [and] central banks will be removing excess liquidity only gradually,” they said. “In addition, retail flows into equities are staying resilient.”

Investors will be keeping an eye on US consumer price index inflation data, due on Wednesday. The monthly oil market report from the OPEC group of producing countries will also be closely watched on Thursday for signs of slowing demand.