A gauge of global stock markets was on track for a fifth straight session of gains and while the euro edged up in choppy trading after the European Central Bank raised interest rates for the first time in more than a decade as it tries to combat inflation.

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The ECB had for weeks flagged a 25 basis point hike, until earlier this week, when sources told Reuters the central bank was weighing a bigger move. The central bank also introduced a bond protection plan, called the Transmission Protection Instrument (TPI), that is designed to cap borrowing costs across the region.

The TPI plan by the ECB is intended to help heavily indebted countries such as Italy, whose coalition government fell after the resignation of Prime Minister Mario Draghi.

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Stocks oscillated between gains and losses, as US equities were buffeted by a drop in crude prices which sent the energy sector .SPNY sharply lower while Tesla .TSLA.O gained following its quarterly earnings.

As the US corporate earnings season rolls along, 91 companies in the benchmark S&P 500 index have reported quarterly results, with 78 percent topping expectations, according to Refinitiv data. That's slightly below the 81 percent beat rate for the past four quarters but well above the 66 percent rate since 1994.

"Everybody is hyper-focused on earnings and generally, you listen to a lot of commentary from management and they are fairly sanguine, a lot of the underlying demand is still strong," said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions.

"Certainly it helps when you start to hear some of these better than feared reports which has pretty much been the way to describe the earnings season so far."

The Dow Jones Industrial Average .DJI rose 162.06 points, or 0.51 percent, to 32,036.90, the S&P 500 .SPX gained 39.05 points, or 0.99 percent, to 3,998.95 and the Nasdaq Composite .IXIC added 161.96 points, or 1.36 percent, to 12,059.61.

US economic data was on the soft side with weekly initial jobless claims touching a fresh eight-month high and a gauge of factory activity in the mid-Atlantic region for July hitting its lowest in slightly over two years.

The data comes ahead of the Federal Reserve's policy meeting next week, in which it is largely expected to hike rates by 75 basis points. Benchmark 10-year notes US10YT=RR last rose 31/32 in price to yield 2.92 percent, from 3.03 percent late on Wednesday.

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The pan-European STOXX 600 index .STOXX rose 0.44 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.44 percent.

The Japanese yen strengthened 0.33 percent versus the greenback to 137.76 per dollar as the Bank of Japan remained an outlier among central banks and left its super-loose monetary policy unchanged on Thursday, as expected, and raised its inflation forecasts slightly. Sterling GBP= was last trading at $1.19, down 0.09 percent on the day.

Oil prices declined for a second straight session, after higher US gasoline stockpiles and an ECB rate hike heightened demand worries and returning oil supply from Libya along with the resumption of Russian gas flows eased supply concerns.

US crude CLc1 recently fell 3.12 percent to $96.76 per barrel and Brent LCOc1 was at $104.37, down 2.38 percent on the day.

(Edited by : Sangam Singh)

First Published:Jul 22, 2022 6:34 AM IST