London (AFP): World stock markets mainly rose Friday as easing US inflation continued to spark hope of a pause to Federal Reserve rate hikes, while investors awaited key bank results on Wall Street.
The European single currency meanwhile struck $1.1245, the highest level since February 2022, and oil prices flatlined before the weekend.
Focus now turns to US corporate earnings season with big-hitting banks Citigroup, JPMorgan and Wells Fargo due to report.
“The slew of numbers we are expecting from US banks… will be very closely followed,” noted Scope Markets analyst Joshua Mahony. “One key point to watch for here will be impairments — even though the monetary policy tightening cycle appears to be closing in on its peak, has the Fed overcooked the situation and will this now leave a lasting scar on economic performance?”
Traders meanwhile welcomed more data showing falling US inflation, giving the Fed room to bring the curtain down on more than a year of rate increases.
Global equities have been bubbling this week on hopes for an end to monetary tightening aimed at taming inflation, which was fuelled by post-Covid reopening, supply chain snarls and Russia’s invasion of Ukraine.
That has come just as China pledges to introduce measures to kickstart its stuttering economy and bring an end to a painful crackdown on the huge tech sector.
Wall Street cheered news Thursday that wholesale prices rose less than expected in June. That followed Wednesday’s report showing the consumer price index below forecasts.
While the CPI remains above the Fed’s target, analysts said there is growing confidence that officials were winning their battle and the economy could avoid a feared recession.
US traders pushed the S&P 500 up almost one percent to its highest finish since April last year, while the Nasdaq surged more than one percent as tech firms benefit from a lower rate environment.
The upbeat mood filtered through to Asia, where Hong Kong rose for a fifth successive day thanks to a bounce in Chinese tech giants.
Shanghai, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok, Manila and Jakarta also gained.
However, Tokyo struggled owing to a pick-up in the yen against the dollar, which has come under pressure against its peers owing to lower expectations about US rates. In Europe, London and Paris stocks rose but Frankfurt lapsed into negative territory.
London – FTSE 100: UP 0.2 percent at 7,452.12 points
Paris – CAC 40: UP 0.3 percent at 7,390.04
Frankfurt – DAX: DOWN 0.3 percent at 16,089.72
EURO STOXX 50: UP 0.2 percent at 4,399.43
Tokyo – Nikkei 225: DOWN 0.1 percent at 32,391.26 (close)
Hong Kong – Hang Seng Index: UP 0.3 percent at 19,413.78 (close)
Shanghai – Composite: FLAT at 3,237.70 (close)
New York – Dow: UP 0.1 percent at 34,395.14 (close)
Euro/dollar: UP at $1.1231 from $1.1226 on Thursday
Dollar/yen: UP at 138.46 yen from 138.03 yen
Pound/dollar: DOWN at $1.3118 from $1.3134
Euro/pound: UP at 85.62 pence from 85.47 pence
Brent North Sea crude: FLAT at $81.34 per barrel
West Texas Intermediate: FLAT at $76.88 per barrel
