Equities creep to five-week highs | Fintech Zoom – World Finance

World stocks have climbed to five-week highs as investors ignored a broadening selloff in global bond markets fuelled by a combination of soaring inflation and hawkish comments from US policymakers.

Even though two-year US Treasury yields are up 73 bps so far in March and set for their biggest monthly jump since 2004, investors have been relatively sanguine about the implications of higher yields on stock market valuations.

MSCI’s broadest gauge of world stocks rose 0.2 per cent to a February 17 high, a level last seen days before Russia invaded Ukraine. An Asian gauge rose 1 per cent to its highest since early March.

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European stocks also rose, with a pan-European equity benchmark hitting a new 1-month high in early London trading. US stock futures signalled small gains.

“It is almost as if the negative impacts of inflation, rising interest rates and the uncertainties of war are no longer of concern,” said Stuart Cole, head macro economist at Equiti Capital, who added that investors were focusing on stocks that could withstand the high inflationary environment.

Technology shares which have had an inverse correlation with higher interest rates in the past were the biggest drivers of broader market gains, with a Hong Kong gauge of technology stocks rising to a three-week high.

Battered e-commerce giant Alibaba, which recently expanded a buyback program, rose 6 per cent and in Tokyo out-of-favour tech investment firm SoftBank Group rose 7 per cent. The main US tech index ended up 2 per cent overnight cutting its year-to-date losses to 10 per cent from 20 per cent at mid-March.

“(Stocks) sold off too much and you see a bit of a rally,” said Jun Bei Liu a portfolio manager at Tribeca Investment Partners in Sydney, but she added it had the flavour of hedge fund short covering rather than new money piling in.

But the bulk the action was focused in the bond markets, with two-year US yields pausing for breath at a…