LONDON: Global stock markets rose Thursday, boosted by a healthy start to the US earnings season as more big-name firms report results and investors put aside concerns over soaring inflation.
Oil rebounded close to Monday's multi-year peaks after the International Energy Agency lifted global demand forecasts -- and cited shortages of natural gas and coal that are sparking a switch to crude.
Wall Street opened higher while stock markets in London, Paris and Frankfurt were all up in afternoon trading as investors digested earnings reports from major US banks.
"These results could set the stage for what to expect in the coming weeks of earnings season and could give an indication of how institutions performed recently, as rising costs and uncertainty in markets worried investors," said XTB analyst Walid Koudmani.
Morgan Stanley beat expectations with record revenues, while both Bank of America and Citigroup saw a jump in profits as they clawed back provisions made at the start of the pandemic.
Those results followed a broadly positive start for the US earnings season on Wednesday when JP Morgan Chase's third-quarter earnings beat expectations.
Delta Air Lines also posted a profitable third quarter despite warning over the impact of fuel prices.
"Earnings season gives investors a chance to ignore some of the noise and market narratives and get into actual numbers," added Markets.com analyst Neil Wilson.
"Only this time we expect the corporate reporting season to underline the inflation narrative."
Traders are meanwhile bracing for the end of an era of cheap cash, as inflation continues to surge on the back of supply chain problems and improving demand.
European stocks extend losses, SAP shines after forecast lift
"Some investors clearly expect the global economy to grow at a good pace despite facing high inflationary pressures stemming from supply-chain bottlenecks and surging energy prices," said Fawad Razaqzada, analyst at ThinkMarkets.
"While that may turn out to be the case, I would still err on the side of caution as incoming macro data and company earnings might suggest otherwise. The supply bottlenecks could be more damaging to the global economy than the markets are expecting," Razaqzada said.
After a year and a half of ultra-loose monetary policies from the world's central banks, which helped spur a rebound from the pandemic collapse and send equities flying, concern about consistently high price rises is forcing officials to tighten their belts.
Several have already started -- including South Korea and New Zealand, with Singapore joining in on Thursday -- but all eyes are on the Federal Reserve, with minutes from its most recent meeting showing it plans to move either next month or in December.
A higher-than-expected reading on US consumer inflation pushed the case for a November start to tapering its massive bond-buying programme, but the main question on traders' lips is now when it will begin to hike interest rates.
On Thursday, China said factory-gate inflation had in September hit its highest level in a quarter of a century owing to a spike in commodity costs and rocketing demand as economies reopen.
And with China a crucial exporter to the world, there are concerns the rises will transfer to other economies.
Key figures around 1350 GMT
New York - Dow: UP 1.0 percent at 34,729.02 points
London - FTSE 100: UP 0.9 percent at 7,203.48
Frankfurt - DAX: UP 1.2 percent at 15,438.68
Paris - CAC 40: UP 1.4 percent at 6,686.39
EURO STOXX 50: UP 1.5 percent at 4,146.34
Tokyo - Nikkei 225: UP 1.5 percent at 28,550.93 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,558.28 (close)
Hong Kong - Hang Seng Index: Closed for holiday
Euro/dollar: UP at $1.1595 from $1.1594 at 2100 GMT
Pound/dollar: UP at $1.3698 from $1.3659
Euro/pound: DOWN at 84.64 from 84.88 pence
Dollar/yen: UP at 113.62 yen from 113.25 yen
Brent North Sea crude: UP 0.7 percent at $83.76 per barrel
West Texas Intermediate: UP 0.5 percent at $80.80 per barrel