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Global stocks rise; BOE decision lifts pound

Global equity prices rose on Thursday, as positive earnings, rising hopes for a ceasefire and the expectation of U.S. interest rate cuts lifted sentiment. Meanwhile, oil prices stabilized after news broke that Presidents Putin and Obama would meet.

Gold prices, viewed as a safe place in turbulent times, reached a new high.

The MSCI index of global stocks rose by 0.45%, to 937.40. Japanese shares reached a new record high. The Bank of England lowered interest rates, but four of nine policymakers - worried about inflation - voted to maintain rates.

The split vote suggests that the BoE may be about to end its rate-cutting spree. After the decision, sterling was up by 0.38%.

Dominic Bunning is the head of G10 FX Strategy at Nomura. He said, "The vote split was clearly more hawkish that I expected." The U.S. increased tariffs on dozens of imports, bringing the average import duty in the U.S. to its highest level in a century. Investors have largely shrugged off the latest tariffs by U.S. president Donald Trump, including an extra 25% duty on U.S. imported goods from India due to purchases of Russian crude oil and a threat of a 100% duty on U.S. imported chips.

Eddie Kennedy, Marlborough's head of discretionary funds and bespoke fund management, said: "It is surprising that the market continues to melt up despite everything being thrown at it."

The pan-European STOXX 600 gained 1.04% while Europe's FTSEurofirst 300 index grew 1.06%. The euro was also supported by the plans for a Trump-Putin meeting over the Ukraine war.

Barclays' head of European equity strategies, Emmanuel Cau said: "It would be an additional positive if there was a ceasefire."

The Dow Jones Industrial Average dropped 0.32%, while the S&P 500 gained 0.24%.

Capital.com analyst Kyle Rodda said in a recent note that Wall Street "seems to have gotten back its mojo".

There are still persistent downside risks. He said that the number of negative surprises in official statistics is increasing. "Valuations have also been stretched with the forward price-to-earnings hovering at its highest level in four years. "Trade uncertainty persists."

The Nikkei, Japan's stock market index, gained 0.65%.

Taiwan's benchmark stock index soared as much as 2,6% to reach a record high. The shares of chipmaker TSMC, who announced this year additional investments in their U.S. manufacturing facilities, and is therefore expected to be relatively unaffected by the U.S. duty on imported chips, soared at a record high.

The U.S. Dollar gained against other currencies as investors hoped for a more accommodative Federal Reserve policy. This was fueled by disappointing macroeconomic data, and the expectation that Trump would install new board members who share his dovish viewpoints.

The yield on the benchmark U.S. 10 year notes dropped 0.9 basis points from 4,232% at late Wednesday to 4.223%.

Spot gold increased 0.58%, to $3,387.11 per ounce.

Brent crude futures fell 0.07%, to $66.64 per barrel. U.S. crude was flat.

(source: Reuters)