Stocks cheered solid data from China and the United States that were seen as an indicator of resilience rather than a harbinger of more restrictive monetary policy
New York (AFP) - World stock markets rose on Friday with data showing the resilience of the US and Chinese economies, reassuring investors rather than sparking worries about interest rate hikes.
With central banks in the United States, Britain and eurozone raising interest rates to tamp down inflation, signs of economic strength could persuade policymakers to hike rates further for longer and possibly prompt a more severe downturn later.
A strong run of data sent chills through trading floors in February – wiping out almost all of January’s rally – as investors realized the US central bank had more work to do to control prices.
But survey data from both China and the United States were welcomed.
“The general mood has also been helped by better-than-expected economic reports, which while raising concerns about further rate hikes, have also helped to create a mood that the economic picture may not be as dire as had been predicted at the start of the year,” said market analyst Michael Hewson at CMC Markets.
China’s February Caixin services PMI rose to 55.0 from 52.9, where a score above 50 represents expansion.
Meanwhile, the ISM services PMI in the United States was also in growth territory, dipping to 55.1 from 55.2.
February’s reading was driven by growth in more than a dozen industries including agriculture and real estate, said the ISM report.
“Overall, the survey is signaling ongoing expansion in service sector activity, not yet responding to more restrictive monetary policy,” said Rubeela Farooqi, chief US economist at research consultancy High Frequency Economics.
All three major US indices finished solidly higher, with the S&P 500 winning 1.6 percent and pushing to a gain for the week.
Falling government bond yields also helped boost equities.
In Europe, London stocks ended with a marginal gain, but Paris rose 0.9 percent and Frankfurt climbed 1.6 thanks to a 10.6 percent jump in Volkswagen shares.
The German automaker reported a net profit of 15.8 billion euros for 2022, up 2.6 percent on the previous year, and expressed optimism it would sell considerably more cars this year as global supply chain problems ease.
- Key figures around 2215 GMT -
New York - Dow: UP 1.2 percent at 33,390.97 (close)
New York - S&P 500: UP 1.6 percent at 4,045.64 (close)
New York - Nasdaq: UP 2.0 percent at 11,689.01 (close)
London - FTSE 100: UP less than 0.1 percent at 7,947.11 (close)
Frankfurt - DAX: UP 1.6 percent at 15,578.39 (close)
Paris - CAC 40: UP 0.9 percent at 7,348.12 (close)
EURO STOXX 50: UP 1.3 percent at 4,294.80 (close)
Tokyo - Nikkei 225: UP 1.6 percent at 27,927.47 (close)
Hong Kong - Hang Seng Index: UP 0.7 percent at 20,567.54 (close)
Shanghai - Composite: UP 0.5 percent at 3,328.39 (close)
Euro/dollar: UP at $1.0635 from $1.0597 on Thursday
Pound/dollar: UP at $1.2046 from $1.1946
Euro/pound: DOWN at 88.32 pence from 88.71 pence
Dollar/yen: DOWN at 135.83 yen from 136.77 yen
West Texas Intermediate: UP 1.9 percent at $79.68 per barrel
Brent North Sea crude: UP 1.3 percent at $85.83 per barrel