On Thursday global equities reached a new record and bond yields sank to fresh lows, as
investors positioned for an extended era of cheap money ahead of the
European Central Bank's looming bond-buying plan.
Consumer morale picked up in the euro zone's largest economies and bank lending fell at a slower place, which might be the sign the bloc's economy may be turning a corner.
Central banks' battle to keep cash flowing into the financial system to avert a deflationary spiral has driven core European government bond yields into or close to negative territory, with German seven-year bond yields the latest to go below zero for the first time on Thursday.
That has pushed investors into higher-yielding assets like equities and the MSCI All-Country World equity index climbed to a new record high of 434.40 points.
Bets
that a U.S. rate hike might come later than expected, triggered by
comments by Fed chair Janet Yellen this week, also bolstered views that
the environment of rock-bottom rates would hold for the near future, says Reuters.
"We think central bank easing efforts will continue to provide liquidity to the markets and expect that could help drive flows into equities globally as investors search for yield," said Mark Mobius, emerging markets fund manager at Franklin Templeton.
As Germany sold its first five-year debt with negative yields on Wednesday, German seven-year sovereign bonds registered a new record low of -0.003 percent. Irish borrowing rates fell below 1 percent for the first time.
Germany's consumer morale rose to its highest level in more than 13 years heading into March as low oil prices fed through to households.
Asian shares slid from a five-month high, but in Europe corporate updates from blue chips including Anheuser-Busch Inbev, Allianz and Deutsche Telekom saw the pan-European FTSEurofirst 300 rise 0.3 percent.
About two thirds of the way into Europe's earnings season, 55 percent of companies have met or beaten profit forecasts. Overall, fourth-quarter earnings are expected to grow by 19.5 percent which would be Europe's best season in 3-1/2 years.
In the meantime, shares of Royal Bank of Scotland fell 4 percent, after the lender reported a 2014 loss of 3.5 billion pounds.
The Russian rouble strengthened for the third straight day. In general, emerging markets got support from Yellen's comments and a steadier U.S. dollar.
Greek equities were down more than 2 percent, with the country's fate in focus after it said on Wednesday it would struggle to make debt repayments to the International Monetary Fund and the European Central Bank this year.
