LONDON: Europe's major equity markets rebounded Tuesday from recent falls, despite earlier Asian losses, as investors fished for bargain shares on the eve of key US inflation data, dealers said.
In late morning deals, Frankfurt won 1.3 percent, London stocks added 0.6 percent and Paris gained 1.5 percent, after all three began the week in negative territory.
World oil prices also recovered from Monday's drop but the dollar traded mixed.
Bitcoin advanced close to $42,000, one day after the world's most popular cryptocurrency sank below $40,000 on fears of reduced liquidity as a result of US monetary policy tightening.
Bitcoin falls under $40,000 to a 5-month low
Richard Hunter, head of markets at Interactive Investor, pointed to "some tentative buying activity ... as investors sought to benefit from the recent dips."
However, he cautioned that markets remain overshadowed by surging inflation -- and central bank efforts to contain it.
"The backdrop remains unchanged, with the pace and amount of (US) interest rate rises likely to become clearer over the next few sessions in the face of persistent inflation," Hunter added.
On the downside, most Asian indices retreated on lingering concern about the Federal Reserve's plans to wind back its financial support measures and lift interest rates within months in order to tackle surging inflation.
Markets are now cautiously awaiting the release of US inflation figures on Wednesday, which could play a major role in the Fed's thinking.
"Investors should keep in mind that stock markets are likely to be volatile over the next few days, mainly because of the inflation data scheduled to be released tomorrow," said AvaTrade analyst Naeem Aslam.
While the fast-spreading Omicron coronavirus variant plays on nerves, traders are now coming to terms with the imminent end to the pandemic era of ultra-cheap cash, which helped the economic recovery and fanned a global rally for nearly two years.
A pick-up in consumer activity, surging wages, supply chain problems and rising energy costs are combining to push inflation in several countries to highs not seen for a generation, ramping up pressure on central bankers to act before it gets out of control.
European shares slip as rate hike worries, rising infections weigh
Several global central banks have already started hiking borrowing costs, including the Bank of England.
All eyes are now on the US Federal Reserve as it tees up its first move, with commentators predicting it will come in March, after it has finished winding up its bond-buying programme.
That could be followed by two or three more by the end of the year, according to analysts.
In remarks released ahead of his Senate confirmation hearing on Tuesday, Fed boss Jerome Powell indicated that the bank was ready to act.
Key figures around 1000 GMT
London - FTSE 100: UP 0.6 percent at 7,490.07 points
Frankfurt - DAX: UP 1.3 percent at 15,979.13
Paris - CAC 40: UP 1.5 percent at 7,218.63
EURO STOXX 50: UP 1.4 percent at 4,300.14
Tokyo - Nikkei 225: DOWN 0.9 percent at 28,222.48 (close)
Hong Kong - Hang Seng Index: FLAT at 23,739.06 (close)
Shanghai - Composite: DOWN 0.7 percent at 3,567.44 (close)
New York - DOW: DOWN 0.5 percent at 36,068.87 (close)
Euro/dollar: UP at $1.1346 from $1.1337 late Monday
Pound/dollar: UP at $1.3608 from $1.3575
Euro/pound: DOWN at 83.34 pence from 83.42
Dollar/yen: UP at 115.32 yen from 115.20 yen
Brent North Sea crude: UP 1.5 percent at $82.09 per barrel
West Texas Intermediate: UP 1.7 percent at $79.52
Comments
Comments are closed.