World stocks bounced back from losses earlier in the week on Friday, data showing US wholesale prices rose 11% in April from a year earlier.
On Thursday, gains in Europe and Asia were mixed on Wall Street. Oil prices and US futures were also higher.
Investors are confused over what lies ahead with inflation and the reaction of the US central bank. Trading has been volatile, with the index prone to sharp fluctuations as investors try to shield their portfolios from the effects of high inflation in decades.
“Nothing in the world has changed materially since yesterday, and if anything, Russia/Europe risks are rising. Compared to a structural change in sentiment, today’s rally looks more like a technical rebound after a tough week As such, it should be taken with a grain of salt,” Oanda’s Jeffrey Haley said in a report.
Federal Reserve Chairman Jerome Powell acknowledged high inflation Thursday by winning Senate confirmation for a second four-year term for the first time. And weakness in other economies could thwart their efforts to survive a recession.
Powell had previously sought to portray the Fed’s efforts to tighten interest rates in line with a so-called “soft landing” for the economy.
In Frankfurt, the DAX gained 1.1% to 13,894.26. Britain’s FTSE 100 rose 1.3% to 7,324.04, while the CAC 40 in Paris rose 1.2% to 6,281.46. The future of the S&P 500 rose 1.2%, while the future of the Dow Industrials rose 0.8%.
In Asian trade, Hong Kong’s Hang Seng index rose 2.7% to 19,898.77 and Tokyo’s Nikkei 225 jumped 2.6% to 26,427.65. South Korea’s Kospi rose 2.1% to 2,604.24, and in Sydney, the S&P/ASX 200 rose 1.9% to 7,075.10.
The Shanghai Composite Index rose 1% to 3,084.28 and India’s Sensex rose 1.4%.
The central bank moves to fight back against price increases by raising interest rates, while some currencies are being devalued when the dollar rises. The Japanese yen has weakened sharply over the past several months, while the Chinese yuan, whose value is regulated against other currencies, has also weakened.
Similarly, the euro has weakened amid fighting in Ukraine and uncertainty over Russian gas and oil supplies. , The euro was trading at $1.0410 early Friday, falling below the $1.0500 level, which was up for most of the week.
“European risk sentiment is getting worse with news of Russia cutting gas supplies in retaliation for sanctions,” Stephen Innes of SPI Asset Management said in a commentary.
“Euro (euro) has crashed through $1.05 and even broke $1.04 on the back of the news. Indeed, it really highlights the uncertainty as we move forward with the threat and disruption of Russian energy supplies.” are,” he said.
The dollar was up from 128.42 at 128.67 yen. Against the Chinese yuan, it was up from about 6.41 yuan a month ago at $6.79 a dollar.
On Thursday, the S&P 500 was down 0.1% and the Dow Jones Industrial Average was down 0.3%. Nasdaq closed with a gain of 0.1%.
The indices have been on a sharp weekly downward trend so far this year, exacerbating the market’s bearishness. The benchmark S&P 500 is now down 17.5% this year, while the Nasdaq is down 27.3%.
The smaller company’s shares outperformed the rest of the market. The Russell 2000 rose 1.2%.
Labor Department reports wholesale prices rose 11% in April Compared to a year ago, there are concerns that manufacturing costs are being passed on to consumers, who could pull back spending, spurring economic growth.
Labor Department’s report on Wednesday on consumer prices Prices outside food and gasoline showed higher than expected. That “core inflation” may be more predictive of future trends.
Inflation has increased due to Russia’s attack on Ukraine and the impact of conflict on rising energy prices. China’s recent lockdown Supply chain and production problems at the center of rising inflation have also worsened amid concerns about a COVID-19 resurgence.
In other trade, US benchmark crude oil rose 97 cents to $107.10 a barrel in electronic trading on the New York Mercantile Exchange. It rose 42 cents to $106.13 a barrel on Thursday.
Brent crude, the pricing basis for international trading of crude, rose $1.18 to $108.63 a barrel.