LONDON, May 14 AI fervour kept world stocks at record highs on Thursday as investors looked past rising borrowing costs, a high-stakes summit between U.S.
President Donald Trump and China’s Xi Jinping, and a live political crisis in Britain
The pan-European STOXX 600 rose 0.5% and, with Wall Street futures pointing 0.3% higher, MSCI’s global stocks index extended its rebound from Iran war lows to 15%. [.EU] Much of the focus was on Beijing where Xi told Trump that trade talks were making progress. There was a warning about Taiwan too, but traders were banking on tariff and AI deals to keep the rally running. Europe’s other big story was Britain’s political crisis, where Prime Minister Keir Starmer faced a potential leadership challenge after heavy losses in regional elections last week.
Health minister Wes Streeting – seen as a possible successor – said he was resigning and had “lost confidence” in Starmer’s leadership, urging him to step aside. The uncertainty kept the UK’s 10-year borrowing cost above 5%, having hit its highest since the 2008 financial crisis this week as markets braced for a likely bruising leadership battle. Sterling, down almost 1% since Monday, was a fraction lower at $1.3505, although data showing Britain’s economy unexpectedly grew in March offered some support. “We must presume there is going to be a leadership challenge,” Franklin Templeton’s Global Investment Strategist Michael Browne said.