LONDON – European stocks bounced on Friday as global markets showed some ground to return after a hurricane week, with investors assessing the outlook for inflation and interest rates.
As of noon, the Pan-European Stoxx 600 added 1.4%, with travel and leisure stocks leading a 3% jump as all sectors and major markets traded in positive territory.
European markets fell on Thursday as investors worried about slower growth, rising interest rates and the US red-hot April inflation data, which raised concerns that aggressive interest rates are on the way.
US Federal Reserve Chairman Jerome Powell said on Thursday that he could not guarantee a so-called “soft landing” that would reduce inflation without pushing the economy into recession.
Global stocks have endured a rollercoaster week but look set to get back some ground on Friday. Shares of Asia-Pacific closed higher on Friday, with Japan’s Nikkei 225 leading the way with a 2.6% climb.
U.S. stock futures were also higher in early pre-market trading as investors hoped the S&P 500 could avoid sliding into bear market areas, with the index closing more than 18% of its all-time high on Thursday, just 2% shy of an official bear market.
The tech-heavy Nasdaq is already in a bear market, closing down more than 29% from its all-time high on Thursday, while the Dow Jones Industrial Average fell for six consecutive trading sessions.
In Europe the Stoxx 600 Friday session has started down 13% since the beginning of the year.
Investors are also watching the geopolitical decline from the war in Ukraine. Russia threatened retaliation against Finland on Thursday when Finnish leaders said the northern European country must apply to join NATO “without delay”.
European leaders are facing a race to secure alternative gas suppliers after Moscow announced sanctions on its majority state-owned corporation Gazprom’s European subsidiaries. The move comes after Ukraine’s state-owned grid operator suspended Russian flows to Europe through a key entry point.
On the data front, French inflation was confirmed at 5.4% year-on-year in April.
Eurozone industrial production fell 1.8% in March from a month earlier, sharply lower than the 1% expected by a Dow Jones poll, due to the outbreak of war in Ukraine.
In terms of private share price movements, both Sweden’s Storskozen Group and Finnish state-owned energy company Fortum have risen more than 10%.
Shares of the Belgian pharmaceutical company UCB fell 15% when the US Food and Drug Administration said it could not approve a major psoriasis drug.
Swedish industrial company Atlas Copco fell 75% due to a recalculation following a share split that took effect on Friday, with one share being replaced by four new common shares and one redemption share.
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