LONDON – World stocks ran higher on Thursday following their slowest quarter in a year, as US economic strength offset the return to strict COVID lockdown measures in parts of Europe and elsewhere.

US President Joe Biden’s sweeping US$2.3 trillion plan to rebuild America’s crumbling infrastructure lifted MSCI’s 50-country world index for a second day running, while oil jumped 1.5 percent before an OPEC meeting.

The S&P 500 on Thursday crossed the 4,000 mark for the first time, as technology shares, led by chipmakers, gained following an upbeat earnings outlook by Micron, while optimism about the U.S. economic growth lifted sentiment.

Seven of the 11 S&P sectors rose, with technology and communication services gaining more than 1.5 percent.

The technology-heavy Nasdaq jumped 1.5 percent as “high flying” stocks including Amazon.com Inc, Apple Inc, Alphabet Inc, Microsoft Corp and Facebook Inc added between 1.1 percent and 2.3 percent after underperforming last month on concerns over elevated valuations.

At 9:42 a.m. ET, the S&P 500 was up 27.80 points, or 0.70 percent, at 4,000.69, and the Dow Jones Industrial Average was up 79.34 points, or 0.24 percent, at 33,060.89.

Asian markets had seen a strong finish with a late burst pushing shares in the Chinese mainland up 1.2 percent, and Europe’s STOXX 600 shrugged off France’s new lockdown order to push back towards its pre-COVID record highs.

The euro edged up, too, and euro zone bond yields held their ground, as the European Central Bank’s chief economist reiterated that the ECB had no intention of curbing its support despite rising inflation.

IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI) showed euro zone factory activity rising at its fastest pace in the survey’s near 24-year history, although lockdowns and supply chain issues may soon rein it in.

Inflation data on Wednesday had shown euro zone inflation accelerated to 1.3 percent in March from 0.9 percent a month earlier.

“The biggest question, the million-dollar question now, is where is the landing zone for inflation,” said Geraldine Sundstrom, an asset allocation portfolio manager at PIMCO.

“Will it feed on itself or will it come back to a comfortable level … this is the thing that will drive the central banks in whether they take away the punch bowl or not.”

Wall Street futures pointed to early gains for the S&P 500 and other major US markets, while benchmark 10-year US Treasuries were sat at 1.76 percent, having started the year at just over 0.9 percent.

The dollar consolidated its healthy 3.5 percent first-quarter gain, though it didn’t seem ready to go anywhere fast.

The euro changed hands at US$1.1720, after hitting a near five-month low of US$1.1704. Against the British pound, the common currency was flat after hitting a 13-month low of 0.85025 pound.

President Emmanuel Macron ordered France into its third national lockdown on Wednesday while the euro zone lagged the United States and Britain in vaccination programmes.

“As long as the news flow on either side of the Atlantic is more or less diametrically opposed, there is really not much to be said in support of the euro,” Commerzbank analyst Antje Praefcke wrote to her clients.

Shifting sentiment

US markets closed out the quarter with gains – the S&P 500 rose 5.8 percent and the Dow Jones 7.8 percent over the three months. However, the 4.1 percent quarterly rise in world stocks was the slowest since the recovery from last March’s meltdown began.

Risk-sensitive currencies reflected that on Thursday, although the approaching long Easter weekend thinned trade. The Australian dollar fell 0.7 percent to US$0.7535, its lowest since December, and the yuan and kiwi dollar also slipped.

Australia’s fastest home-price gains in more than three decades last month also point to some of the side effects of ultra-easy monetary policy, possibly putting pressure on central banks to curtail support sooner than they had planned.

Other signs of fragility in sentiment included the flop listing of food-delivery company Deliveroo, which fell by nearly a third on its London debut on Wednesday, and nerves following the fire sale of US hedge fund Archegos Capital’s portfolio.

Commodities were mixed. Brent oil prices jumped 1.5 percent to US$63.5 barrel on talk that OPEC and its allies will keep production curbs in place later in the face of resurgent COVID-19 infections in some regions. Crude surged 25 percent in the first quarter.

Gold, which pays no income, hung on to overnight gains to trade at US$1,714 an ounce. Even so, it suffered its worst quarter since late 2016 owing to the rise in US yields.