European shares reach new record high, bond yields drop as inflation fears ease
U.S. and European shares advanced and bond yields dropped on Friday as investors were not bothered by rising U.S. consumer prices and even concerns of long-term inflation pressed on.
The Euro STOXX 600 gained 0.3%, hitting a record high and was on course for a sixth straight day of gains. London shares advanced 0.6%, aided by a 1% gain for the mining sector, while Paris added 0.4%.
The European Central Bank on Thursday raised its growth and inflation projections while pledging a steady flow of stimulus for now. The ECB’s stance lifted investor sentiment.
Meanwhile, the ECB’s dovish commitment to retain its elevated tempo of bond buying held the euro in check at $1.2185.
The MSCI world equity index, added 0.1% while Wall Street futures were flat.
The U.S. consumer price index posted on Thursday its biggest year-on-year gain since August 2008 of 5%, following a 4.2% increase in April.
U.S. stocks reached new record highs, with 10-year U.S. Treasury yields also dipping to a three-month low.