Stocks rally as ECB and BoE hold and global manufacturing improves

Global stock markets rallied on Thursday. The S&P 500 rose 1.3 percent to a new record high of 1,706.87. The STOXX Europe 600 rose 1.2 percent.

There were no new measures from the European Central Bank's monetary policy meeting on Thursday. ECB President Mario Draghi reiterated that interest rates will stay low for the foreseeable future even as economic indicators signal that the worst is over for the eurozone economy.

Indeed, a report from Markit on Thursday showed that eurozone manufacturing returned to expansion in July. Markit's manuacturing PMI for the region rose to 50.3 last month from 48.8 in June.

There were also no new measures announced by the BoE after its monetary policy meeting on Thursday.

The Markit/CIPS UK manufacturing PMI had risen to 54.6 in July from 52.9 in June.

US manufacturing also improved in July. The Institute for Supply Management’s manufacturing PMI jumped to 55.4 last month from 50.9 in June.

Markit's US manufacturing PMI also improved in July, rising to 53.7 from 51.9 in June.

Dampening the mood somewhat was another report on Thursday showing that US construction spending fell 0.6 percent in June.

Earlier on Thursday, there had been mixed data on China's manufacturing activity. The official PMI published by the National Bureau of Statistics rose to 50.3 in July from 50.1 in June but the HSBC PMI compiled by Markit fell to an 11-month low of 47.7 from 48.2.