Stocks back to record ways on Middle East truce hopes

World stocks have climbed for a 10th straight day to hit record highs, as equity markets complete a remarkable six-week round trip from the heavy sell-offs sparked by the United States' and Israel's attacks on Iran. Optimism over a deal to end the war was boosted by comments from both Washington and Tehran and with $US95-a-barrel oil now well off the near $US120 peaks of March, MSCI's main world stocks index advanced 0.25 per cent. It was its first record high since the hostilities erupted at the end of February, and after reassuring global bank earnings lifted the US S&P 500 above 7,000 points on Wednesday, capped an 11 per cent rebound for MSCI World. "It almost looks like the perfect V-shaped recovery," said Standard Chartered's chief investment officer for Africa, Middle East and Europe, Manpreet Gill, explaining that US tech stocks and the easing of oil prices had been big drivers in the bounce. European stocks were not back to their pre-war highs on Thursday, but they also moved 0.2 per cent higher. The region's government borrowing costs dipped again too as traders dialled back bets of higher interest rates, though bonds also remain well off pre-conflict levels. In oil markets, Brent crude hovered just above $US95 a barrel after a source briefed by Tehran told Reuters that Iran could consider allowing ships to sail freely through the Omani side of the Strait of Hormuz without risk of attack as part of proposals it has offered in negotiations with the United States. The US dollar index, which measures the greenback's strength against a basket of six currencies, was 0.1 per cent stronger after eight consecutive day of declines. Aside from war watching, US President Donald Trump has reignited his spat with Fed chair Jerome Powell, threatening to fire him from his standalone seat on the US central bank's Board of Governors if Powell does not vacate it when his term as Fed chief ends on May 15. The dollar's move also meant the euro lost traction, having edged to within touching distance of its highest level since the war began at $US1.182325. Japan's yen firmed to 158.71 meanwhile after the country's finance minister said Tokyo and the US had agreed to intensify communication on exchange rates following her meeting with US Treasury Secretary Scott Bessent on Wednesday. "Markets are now basically looking past the conflict and pricing that there's going to be some kind of settlement," said Khoon Goh, the head of Asia research at ANZ. "As markets are pricing out the war premium, we could see the dollar coming under further pressure and resuming the downtrend that has been established since basically last year." China's yuan traded at near a three-year high of 6.8152 per dollar in offshore markets and Chinese stocks rose more than one per cent after forecast-beating data showed the economy grew five per cent in the first quarter as strong exports offset still-sluggish domestic consumption. MSCI's broadest gauge of Asia-Pacific shares rose 1.2 per cent as Japan's Nikkei 225 jumped 2.4 per cent to a fresh record. Taiwan and Korea's markets weren't too far behind either as Taiwan Semiconductor Manufacturing Co (TSMC), a linchpin of the AI sector, posted a 58 per cent surge in quarterly profits. Gold clawed back 0.8 per cent to $US4,825.79.