May 24, 2012, 08.53 PM | Source: Reuters
Global stocks edged up and the dollar stalled near a 20-month high on Thursday even as data suggested Europe's debt woes are spreading and worsening an economic slowdown worldwide.
Investors looking for bargains bought equities, oil and gold after these assets had been battered on worries about Greece leaving the euro zone and squabbles among European leaders on how to contain the region's long-running debt crisis.
Amid speculation of more coordinated efforts from major central banks to stem further deterioration of the euro zone debt crisis, bond yields of Spanish, Italian and other weaker euro zone members fell. This curbed the safe-haven appetite for US and German government debt.
"We are just being buffeted around by despair and hope of the possible solution to the euro zone crisis. Risk appetite is still at a very low level, but there is plenty of value," said Robert Parkes, equity strategist at HSBC in London.
The MSCI world equity index moved above 300 points, up 0.3% following Wednesday's 1.2% drop.
Europe led the modest rebound in global shares. The FTSEurofirst 300 index of top European stocks was up 1.1 percent at 982.79 after slipping 2.2% in choppy trade on Wednesday.
On Wall Street, the Dow Jones industrial average was up 30.24 points, or 0.24%, at 12,526.39. The Standard & Poor's 500 Index was up 3.89 points, or 0.29%, at 1,322.75. The Nasdaq Composite Index was up 0.94 points, or 0.03%, at 2,851.06.
In Tokyo, the Nikkei index closed up 0.1% at 8,563.38.
Global stocks clawed higher despite a slew of disappointing economic data from Europe, China and the United States which compounded concerns that an economic contraction is spreading across Europe and the rest of the world.
The euro pared losses after touching a near two-year lows in reaction to weak factory and business sentiment data in Germany, the euro zone's most powerful economy.
The euro zone common currency last traded down 0.1% at USD 1.2576 after hitting a USD 1.2514 earlier.
While the euro found some footing, the recent rally in the dollar against major currencies tapered off. The dollar index was last down 0.05% at 82.050 after touching a 20-month high at 82.362.
A Wednesday summit of European Union leaders, who have been advised by senior officials to prepare contingency plans in case Greece decides to quit the currency bloc, was unable to shed new light on what euro zone nations plan to do.
As a result, 10-year German government bond yields fell to a record low of 1.35% before moving higher with a drop in peripheral debt yields.
The yield on 10-year Spanish government debt fell 6 basis points to 6.16%, while the yield on 10-year Italian government notes declined 11 basis points to 5.70%.
Yields on US government debt, which have flirted with historic lows on intense demand for safe assets, rose on jitters about bidding on USD 29 billion worth of seven-year debt to be auctioned at 1 pm (1700 GMT).
In the oil market, July Brent futures rose USD 1.20 at USD 106.76 a barrel, a day after they fell near their lowest in five months. US oil futures jumped USD 1.25 at USD 91.15 a barrel after hitting its lowest level since November 1 on Wednesday.
Spot gold snapped a three-session losing steak, last traded up 0.8% at USD 1,573.56 an ounce.