By Riva Gold 

Global stocks held on to recent gains Thursday, supported by a firmer trend on Wall Street and hopes for more stimulus from the European Central Bank.

The Stoxx Europe 600 edged up 0.3% after climbing for three days, while Germany's DAX rose 0.4% after closing at its highest level this year.

Futures suggested U.S. stocks would add to Wednesday's gains, after major bourses closed at fresh records in their steepest best day since the presidential election.

Investors' focus on Thursday turned to the European Central Bank, which is widely expected to extend its bond-buying program for six months at the conclusion of its meeting later in the day. The bank is running out of bonds to buy, but many expect it to continue at its current pace of EUR80 billion ($85.8 billion) a month with a few tweaks to the program.

"This one is going to be tricky," said Gilles Pradère, a portfolio manager at RAM Active Investments. "I have no strong conviction about what they will do technically, but I think the message will be dovish."

Investors sold German bunds and bought the euro in morning trading, but moves were largely muted. The yield on the 10-year German government bond edged up to 0.370% from 0.344% on Wednesday.

Recent comments from ECB officials have emphasized the importance of preserving stimulus, a message that bond investors appear to have taken to heart. Riskier European debt and Italian debt have rallied this week despite the concerns emanating from the Italian referendum, a move some attribute to expectations for an extension of quantitative easing.

"It's quite dangerous to rock the boat this month, given what's happened in Italy and what's going on with the banks," said Dominic White, chief economist at Absolute Strategy Research.

Italian Prime Minister Matteo Renzi formally resigned on Wednesday, paving the way for a rapid change of government. Italian bank shares continued to climb Thursday but remain down over 40% so far this year.

While consensus has emerged that the ECB is unlikely to do much more than announce a continuation of its existing program later Thursday, some investors worry that it could signal a "tapering" of its QE program soon, lifting real yields ahead of key elections across the eurozone in 2017.

"This is their last hurrah," said Jordan Rochester, strategist at Nomura. Even as inflation remains shy of the ECB's target, eurozone economic data have been better than forecast recently, and the euro has weakened against a rising dollar, alleviating some of the pressure for further stimulus measures. The euro is down about 0.9% against the dollar since the bank's last meeting.

Still, the euro was last up 0.2% against the dollar at $1.0788 around a three-week high, after rising 1.2% so far this week, amid concerns Mr. Draghi could hint in this direction.

"December of last year still haunts us all, when the ECB cut rates and eased policy and the euro still went higher," Mr. Rochester said. He expects the euro reaction to be more muted this time, with positioning less extreme ahead of the meeting and much less at stake in terms of policy.

The moves also come amid a global selloff in long-dated government bonds on expectations that U.S. policy will be reflationary. The yield on the 10-year U.S. Treasury note was last at 2.376% from 2.347% on Wednesday.

Investors have bet that the Trump administration will bring about tax cuts, deregulation and fiscal stimulus, supporting growth and inflation in the world's largest economy and buoying U.S. stocks.

Earlier, markets in Asia closed higher after a rally on Wall Street sent both the S&P 500 and Dow Jones Industrial Average to record highs.

"The promise of fiscal policy is certainly encouraging. but we have to discern the difference between posturing and policy from our president-elect," said Eric Wiegand, portfolio manager at U.S. Bank Wealth Management. "Tax policy and trade policy are very big issues for us, and we're anxious to get a sense of actual policy."

Health care was the only S&P 500 sector to decline Wednesday, while Pfizer Inc., Johnson & Johnson and Merck & Co. were the only three stocks in the Dow to lose ground, following comments on drug pricing from President-elect Donald Trump.

Those moves were echoed in Europe on Thursday, with the health care sector down 0.4% even as wider markets advanced.

Earlier, Japan's Nikkei Stock Average rose 1.5% on Thursday, while Australian stocks added 1.2%.

Markets in Hong Kong added 0.3% while Shanghai stocks fell 0.2% with sentiment subdued in Chinese markets by authorities' increased scrutiny of aggressive stock purchases by some insurance companies.

Tom Fairless and Kenan Machado contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

December 08, 2016 07:35 ET (12:35 GMT)