European stocks higher as L'Oreal shares surge

LONDON: European stock markets mostly rose Friday heading into the weekend, with Paris boosted by a strong rise in L'Oreal's share price.

Wall Street was a touch weaker at the opening bell.

Asian stock markets turned lower earlier Friday as investors cashed in at the end of a mostly positive week.

The dollar meanwhile weakened against the euro and yen, with analysts questioning the chances of a third US interest rate hike this year.

Shares in French cosmetics giant L'Oreal jumped close to four percent as investors bet on a possible ownership change at the company following the death Wednesday of the French cosmetic company's heiress Liliane Bettencourt, who was 94.

- Door open for Nestle -

As L'Oreal's principal shareholder, Bettencourt was the 14th richest person in the world, according to Forbes magazine, which estimated her net worth in March at $39.5 billion.

"The death of Liliane Bettencourt opens the door for Nestle to up their stake in L'Oreal," brokers Liberum said in a note to clients Friday.

But it added: "There is a lot of speculation at this stage: a possible scenario is that Nestle may acquire L'Oreal and there are other rumours that L'Oreal may buy back part of its stake from Nestle."

Focus in Asia was on renewed geopolitical worries after North Korea said it might consider testing a hydrogen bomb in the Pacific.

Rikiya Takebe, senior strategist at Okasan Online Securities, said the possibility of such a test "prompted risk-off sentiment" in the currency market.

Global equities had tracked broadly higher over the past five days on easing geopolitical tensions and Wall Street notched up several records.

At the same time, the dollar had rallied after the Fed announced a timetable to wind up its huge bond-buying stimulus programme and hinted at a third rate hike this year by December.

But Greg McKenna, chief market strategist at AxiTrader, said there was scepticism that the US central bank would be able to lift borrowing costs again this year at the same time as tapering its stimulus, which was put in place during the global financial crisis to keep long-term rates down.

Dealers headed into the weekend a little subdued also after a second downgrade of China's debt rating. The agency also slashed Hong Kong's prime AAA rating Friday.

Investors will be keeping an eye this weekend on speeches by top Fed officials, hoping they will give some clues about the central bank's thoughts on interest rates.

On oil markets, prices were volatile with eyes on a weekend Vienna meeting of oil producing nations inside and outside of OPEC to discuss an ongoing production cut that may be extended.

Russia's energy minister said Friday that he was in favour of continuing cooperation with the OPEC oil cartel as their joint accord to cap output bears fruit in boosting the price of crude.