LONDON: Europe's main stock markets rose Friday, with Paris hitting a record peak as investors awaited key US jobs data and mulled the interest rate outlook. The benchmark Paris CAC 40 index breached the 7,000-point for the first time, while Frankfurt's DAX firmed.
London stocks rose 0.5 percent, aided also by the weak pound one day after the Bank of England unexpectedly held UK interest rates. The sliding pound boosts the share prices of London-listed multinationals earning in dollars.
Oil climbed after OPEC and other major producers stuck to their plan to modestly lift output despite surging demand, while the dollar advanced. Global equities were boosted this week as the Federal Reserve finally announced its plan for tapering the vast bond-buying programme, which has provided crucial support since it was put in place at the start of the pandemic.
The news removed a lot of uncertainty about officials' response to a spike in inflation that is expected to last a lot longer than previously thought. "European markets are on the front foot today," said IG analyst Joshua Mahony.
"Traders will be keeping a close eye out for the latest jobs data today, although the (US) decision to implement tapering does highlight the questionable impact a big or small payrolls figure would have."
Asian bourses however turned mixed Friday, as investors dwelled on surging inflation. The BoE's decision not to lift rates has shocked traders following recent indications from boss Andrew Bailey that it would do so.
While its board signalled a rise was still on the cards in the coming months, it raised questions about how quickly the financial leaders would tighten policy, with forecasts for the Fed's own hiking timeline also put back.
Bond yields, which indicate future pricing for interest rates, sank and raised concerns about further uncertainty, particularly as inflation remains doggedly high owing to supply chain snarls, high commodity prices and wage growth. That has fuelled talk of a period of stagflation when prices surge but economic growth stalls.
"Rates are a global market," said Subadra Rajappa, at Societe Generale.
"Global central banks seem to be pushing back on market expectations for aggressive policy action."
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