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Stocks Rise on Recovery Hopes Before Inflation Data

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Global stock markets mostly rallied Wednesday as investors were buoyed by optimism over China’s reopening and looming data expected to show a further slowdown in US inflation. online news

Investors brushed off warnings that US interest rates would continue to rise, as well as the World Bank’s downgrade to its global growth forecast.

After Asian equities mainly fizzed higher, in Europe, Frankfurt closed 1.2 percent up, Paris gained 0.8 percent and London 0.4 percent.

Wall Street stocks also rose, as the tech-heavy Nasdaq advanced for a third day.

“An upside bias is winning out thus far based on a prevailing view that weakening economic activity and fading inflation will help the Fed realise that it does not need to raise rates much further,” market analyst Patrick O’Hare at Briefing.com said.

After wavering on Tuesday, markets resumed the upward push that has characterised the start of the year thanks to China’s emergence from nearly three years of zero-Covid isolation.

The reopening, easing of Beijing’s tech crackdown and moves to help the property sector have raised hopes for the world’s number-two economy, a crucial driver of global growth.

“Many investors are starting to believe China’s reopening could be faster than expected on pent-up demand, a robust economic rebound and fewer supply constraints,” noted SPI Asset Management analyst Stephen Innes.

Focus this week is on Thursday’s US consumer price index, which is expected to show price gains eased further in December.

While that could possibly allow the Federal Reserve to take a lighter approach to its monetary tightening campaign, policymakers continue to push back against any pivot away from rate hikes.

Company news

In London on Wednesday, shares in JD Sports jumped more than six percent after the retailer posted upbeat Christmas sales.

But Sainsbury dropped more than two percent after the supermarket group also logged rising festive sales — but cautioned over the impact of the cost-of-living crisis.

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Housebuilder Barratt Developments meanwhile slid 0.5 percent after warning of a “marked slowdown” in the UK housing market, hit partly by economic uncertainty and rising home loan interest rates.

In Paris, shares in French luxury giant LVMH rose 2.3 percent after owner Bernard Arnault announced his daughter Delphine would head the empire’s Dior fashion house, in a leadership reshuffle also featuring a new CEO at flagship brand Louis Vuitton.

Key figures around 1645 GMT

London – FTSE 100: UP 0.4 percent at 7,724.98 points (close)

Frankfurt – DAX: UP 1.2 percent at 14,947.91 (close)

Paris – CAC 40: UP 0.8 percent at 6,924.19 (close)

EURO STOXX 50: UP 1.0 percent at 4,099.76

New York – Dow: UP 0.3 percent at 33,785.95

Tokyo – Nikkei 225: UP 1.0 percent at 26,446.00 (close)

Hong Kong – Hang Seng Index: UP 0.5 percent at 21,436.05 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,161.84 (close)

Euro/dollar: UP at $1.0756 from $1.0733 on Tuesday

Dollar/yen: UP at 132.50 yen from 132.26 yen

Pound/dollar: DOWN at $1.2133 from $1.2154

Euro/pound: UP at 88.65 pence from 88.32 pence

Brent North Sea crude: UP 2.7 percent at $82.26 a barrel

West Texas Intermediate: UP 2.7 percent at $77.16

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