Risk appetite returns as euro, Bund yields rise, copper surges

LONDON: World stocks hit a three-week high on Thursday and the euro and German Bund yields also rose as investors priced in a potentially earlier-than-expected wind-down of stimulus from the European Central Bank.

The selloff in safe-haven Bunds drove money into riskier assets, especially financial stocks, despite investors' anxiety over how a G7 leaders summit that kicks off on Friday will pan out in view of global trade concerns.

Bank stocks, which tend to gain from higher bond yields, drove European shares up in early trade. The pan-European banks index jumped 1.4 per cent, helping the STOXX 600 gain 0.5 per cent.


Banks remain the worst-performing sector in Europe year-to-date, however, having been dented by a selloff triggered by political risk in Italy.

MSCI's index of world stocks rose 0.3 per cent to its highest since May 14, helped by Asian shares which climbed to an 11-week high overnight.

The euro and Germany's benchmark 10-year bond both climbed on signs that the ECB could soon call an end to its stimulus programme.