Picture: ISTOCK
Picture: ISTOCK

NEW YORK — Shares on major equity markets worldwide touched two-month highs on Thursday, led by emerging markets, as concerns eased about global growth and commodities prices extended their recovery.

Emerging markets stocks rose 1.4%, the fifth straight day of gains, their longest winning streak so far this year. Wall Street was modestly lower, but US stocks have recovered notably from lows reached in February.

The MSCI emerging markets index was on track for its biggest weekly gain since October 2015, led by South African shares, which rose to their highest in three months. The rally has followed a cut in reserve requirements for Chinese banks earlier in the week, a move that analysts say could add $100bn to the Chinese economy.

"(The rise) could also be a reaction to the January selloff -it may have been a bit overdone. It was all very doom-and-gloom at the time, but emerging markets aren’t falling off a cliff," said William Jackson, senior EM economist at Capital Economics.

Emerging market stocks fell nearly 17% in 2015, and more than 6.5% in January, as investors pulled back on riskier stock markets due to concern about weak demand worldwide. That concern was fanned by sharp falloffs in commodities prices, particularly oil.

Since then, oil has recovered some of its losses, though it still trades far below its average over the last year. On Thursday, Brent crude rose 0.4% to $37.06 and US crude was up 0.9% to $34.94.

Commodities have surged in tandem with the return of risk appetite that has swept markets over the past two weeks. Copper prices hit their highest since November, backed largely by the stimulus news from China. Copper was up 1.3% on the day.

China accounts for nearly half of global copper consumption estimated at about 22-million tonnes this year. China’s demand growth slowed to about 2% last year, compared with more than 5% in previous years.

Zinc was up 1.1% at $1,834 and lead gained 0.7% to $1,830.

MSCI’s world equity index rose 0.36%. The Dow Jones industrial average fell 62.25 points, or 0.37%, to 16,837.07, the S&P 500 lost 7.06 points, or 0.36%, to 1,979.39 and the Nasdaq Composite dropped 25.09 points, or 0.53%, to 4,678.33.

The pan-European FTSEurofirst 300 stock index dipped 0.4% but held within sight of Wednesday’s one-month peak.

The US non-manufacturing sector expanded at a slower pace in February from January, pushing down the dollar, which makes dollar-denominated commodities more attractive for non-US firms when it falls.

The dollar index, which measures the greenback against six major rivals, was down 0.4%. US Treasury prices were flat as investors looked ahead to Friday’s key employment report. A solid jobs report could bolster expectations that the Federal Reserve remains on track to raise interest rates later this year. The 10-year US benchmark was down 3/32 to yield 1.85%.

Reuters