US and European stock markets advanced Friday as traders shrugged off disappointment over China’s latest boosts to its beleaguered economy and reacted to political and business developments.
Wall Street stocks opened higher, rebounding from losses following concerning inflation data.
Shares in semiconductor manufacturer Broadcom jumped more than 19 percent on AI growth prospects and upscale home furnishing retailer RH around 16 percent on an improving demand outlook.
“That is a nice combination for market participants to contemplate, as it has positive connotations for enterprise spending and consumer spending,” said Briefing.com analyst Patrick O’Hare.
Investors were also looking ahead to the US Federal Reserve’s meeting next week, when it is tipped to cut borrowing costs for the third time.
“While the markets still anticipate a rate cut from the Federal Reserve next week, the likelihood of a move in January has dropped,” said Patrick Munnelly, partner at broker Tickmill Group.
There is growing concern over the inflationary pressures from president-elect Donald Trump’s pledges to cut taxes and impose tariffs, as inflation still stands above the bank’s target.
European markets were mostly higher following interest-rate cuts the day before by the European Central Bank (ECB) and the Swiss central bank.
Paris stocks rose after French President Emmanuel Macron named his centrist ally Francois Bayrou as prime minister, ending days of deadlock over finding a replacement for Michel Barnier.
Frankfurt also gained, despite the German central bank sharply downgrading its growth forecasts on Friday for 2025 and 2026. It predicted a prolonged period of weakness for Europe’s biggest economy.
London markets were flat and the pound dropped after official data showed that the UK economy unexpectedly shrank for the second consecutive month in October.
The euro recovered after flirting with two-year lows against the dollar following a warning Thursday by ECB president Christine Lagarde that the eurozone economy was “losing momentum”, cautioning that “the risk of greater friction in global trade could weigh on euro area growth”.
In Asia, Hong Kong and Shanghai both tumbled as investors panned Beijing’s pledge to introduce measures aimed at “lifting consumption vigorously” as part of a drive to reignite growth in the world’s number two economy.
President Xi Jinping and other key leaders said at the annual Central Economic Work Conference they would implement a “moderately loose” monetary policy, increase social financing and reducing interest rates “at the right time”.
The gathering came after Beijing in September began unveiling a raft of policies to reverse a growth slump that has gripped the economy for almost two years.
“We’re still not convinced that policy support will prevent the economy from slowing further next year”, said Julian Evans-Pritchard, head of China economics at research group Capital Economics.
Shares fell in Tokyo even as the Bank of Japan’s closely watched Tankan survey indicated a slight increase in confidence among Japan’s major manufacturers.
Seoul extended to four days a rebound from the selling sparked by South Korean President Yoon Suk Yeol’s brief martial law declaration, as the focus there turns to a second impeachment vote planned for Saturday.
The advance helped the Kospi briefly rise back above the level it sat at before Yoon’s December 3 shock.
– Key figures around 1430 GMT –
New York – Dow: UP 0.1 percent at 43,975.94 points
New York – S&P 500: UP 0.3 percent at 6,068.50
New York – Nasdaq Composite: UP 0.5 percent at 19,995.18
London – FTSE 100: FLAT at 8,311.13
Paris – CAC 40: UP 0.3 percent at 7,444.56
Frankfurt – DAX: UP 0.2 percent at 20,469.53
Tokyo – Nikkei 225: DOWN 1.0 percent at 39,470.44 (close)
Hong Kong – Hang Seng Index: DOWN 2.1 percent at 19,971.24 (close)
Shanghai – Composite: DOWN 2.0 percent at 3,391.88 (close)
Euro/dollar: UP at $1.0498 from $1.0468 on Thursday
Pound/dollar: DOWN at $1.2652 from $1.2669
Dollar/yen: UP at 153.39 yen from 152.68 yen
Euro/pound: UP at 82.99 pence from 82.59 pence
Brent North Sea Crude: DOWN 0.1 percent at $71.05 per barrel
West Texas Intermediate: UP 0.4 percent at $70.32 per barrel
burs-rl/jj
