Global stocks rise as markets eye 2021 recovery

European and US stocks pushed higher Tuesday on growing confidence in a global economic recovery as the US Congress neared final passage of President Joe Biden's $1.9 trillion economic relief package.

On Wall Street, the tech-rich Nasdaq, which has underperformed in recent weeks, shook off recent weakness and finished up 3.7 per cent in its best session since November, fueled by a nearly 20 per cent surge in Tesla shares and big jumps in Apple, Facebook and other tech giants.

"The fact that we're up substantially is a good indication that maybe Nasdaq has found a bottom," said Peter Cardillo of Spartan Capital Securities, who cited Tuesday's pullback in Treasury yields as a factor supporting tech shares.

Investors have pencilled in a jump in economic growth throughout 2021, boosted in part by Biden's plan, which includes stimulus checks of up to $1,400 to most US households and extensions of unemployment benefits, among other items.

Earlier, Frankfurt's DAX closed at a record high for a second straight day, while London and Paris also advanced.

"The positive mood is being fueled by the hopes the US government will implement the $1.9 trillion relief package soon," said David Madden at CMC Markets UK.

Sentiment was also boosted by the Organization for Economic Co-operation and Development, which sharply raised its 2021 global growth forecast, saying the deployment of vaccines and monetary easing by central banks have greatly improved economic prospects.

Concerning inflation, the organization said underlying price pressures generally remain mild and are being held in check by ample spare capacity around the world.

Next week's US Federal Reserve policy meeting will be pored over for signs of change in the bank's outlook for interest rates and its huge bond-buying scheme, as Biden's stimulus is likely to have been signed by then.

Oil prices rose and then fell back, a day after Brent briefly shot above $71 per barrel following a drone attack on Saudi oil facilities, with the main international contract slumping below $68.

"Today's choppy trade could reflect hesitancy to have a big position before the EIA weekly crude oil inventory report," said analyst Edward Moya at currency trading platform Oanda, referring to the weekly US government data on the market.

"Energy traders will want to closely watch how strong US production can bounce back and if that poses a risk for OPEC+'s hesitancy to raise output," he added.

Last week, OPEC and its allies held back on most of its scheduled production cuts despite indications of greater demand as vaccination campaigns in the United States and elsewhere help economies get back to work.