Beijing: Global stocks and Wall Street futures rose Friday ahead of a United States inflation update that traders hope might prompt the Federal Reserve to ease plans for more interest rate hikes.
London and Frankfurt opened higher. Shanghai and Tokyo advanced. Oil prices declined.
Wall Street rose Thursday as worries about the global financial system eased following the collapse of two US banks and one in Switzerland.
Traders hope a measure of US inflation due out Friday that is closely watched by the Federal Reserve will show upward pressure on prices easing. That might prompt the Fed to postpone plans for a possible rate hike at its May meeting.
A softer inflation reading would be a “signal to continue with the risk-on theme”, said Tim Waterer of Kohle Capital Markets in a report.
Inflation in the 20 countries that use the euro slowed to 6.9 per cent in March from 8.5 per cent the month before.
Food costs are still on the rise, but energy prices fell, making a sharp turnaround after months of punishing increases, according to data released Friday by the European Union’s statistics agency, Eurostat.
In early trading, the FTSE 100 in London gained 0.2 per cent to 7,634.76. The DAX in Frankfurt rose 0.2 per cent to 15,545.50 and the CAC 40 in Paris advanced 0.3 per cent to 7,286.30.
On Wall Street, futures for the benchmark S and P 500 index and the Dow Jones Industrial Average were up less than 0.1 per cent.
Thursday, the S and P 500 index rose 0.6 per cent. The Dow gained 0.4 per cent and the Nasdaq composite added 0.7 per cent.
In Asia, the Shanghai Composite Index rose 0.4 per cent to 3,272.86 after an official survey showed China’s factory activity grew at a slower pace in March but was stronger than expected following the end of anti-virus restrictions. The Hang Seng in Hong Kong added 0.4 per cent to 20,400.11.
The Nikkei 225 in Tokyo advanced 0.9 per cent to 28,041.48 after government data showed factory output rebounded and retail sales rose in February.
The Kospi in Seoul added 1 per cent to 2,476.86 after government data showed factory output declined 3.2 per cent from the previous month in February. Sydney’s S and P-ASX 200 was 0.8 per cent higher at 7,177.80.
India’s Sensex advanced 1.7 per cent to 58,954.14. New Zealand and Jakarta declined while Singapore and Bangkok advanced.
Traders were rattled by this month’s bank failures but regulators appear to have calmed fears by promising lending measures if needed to keep other institutions stable after repeated rate hikes caused prices of bonds and other assets on their books to fall.
Markets have shifted focus back to uncertainty about the global economic outlook as the Fed and other central banks try to extinguish inflation. Prices for some commodities have softened and increases in many countries have slowed, but inflation remains a threat to stability in many emerging markets.
Friday, Egypt’s central bank raised interest rates as the continues battles surging prices and a depreciating currency. The most basic lending rate increased to 18.25 per cent from 16.25 per cent to help quash spiralling inflation, which hit a 32.9 per cent annual rate in February.
Traders have begun betting the Fed will be forced to cut rates as early as mid-year to shore up economic growth. That is despite statements by Fed officials that they plan to raise rates one more time before holding them steady into at least early 2024.
The Fed’s key lending rate stands at a range of 4.75 per cent to 5 per cent, up from close to zero at the start of last year.
A report Thursday showed slightly more US workers applied for unemployment benefits last week than expected. That could be a sign of increased layoffs, but the number is low compared with historical levels.
The government also revised down its estimate of US economic growth in the final quarter of 2022 but still showed growth.
In energy markets, benchmark US crude shed 35 cents to $ 74.02 per barrel in electronic trading on the New York Mercantile Exchange.
The contract rose $ 1.40 Thursday to $ 74.37. Brent crude, the price basis for international oil trading, lost 57 cents to $ 78.03 per barrel in London. It advanced 99 cents the previous session to $ 79.27.
The dollar gained to 133.29 yen from Thursday’s 132.47 yen. The euro declined to $ 1.0884 from $ 1.0904.
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