London (AFP) – Asian and European stocks rose Thursday after modest Wall Street gains as investors kept a wary eye on US bond yields, while oil sank further on stubborn demand fears.
Markets were rocked earlier this week as robust US employment data and spiking Treasury yields stoked fears of higher-for-longer interest rates.
All eyes will now be on Friday’s US employment figures for clues on the health of the world’s biggest economy and the US Federal Reserve’s monetary policy outlook.
“The markets sell-off which saw government bond prices fall and yields rise has taken centre stage this week, and investors continue to watch the 10-year Treasury yield like a hawk,” said AJ Bell investment director Russ Mould.
“Having dipped slightly on Wednesday, the yield has since crept back up to 4.75 percent as investors readjust portfolios to align with the prospect of interest rates staying higher for longer.”
London equities advanced 0.5 percent nearing midday, while Frankfurt and Paris each added 0.1 percent.
Wall Street finished higher Wednesday, snapping a three-day losing streak, with the tech-rich Nasdaq closing up 1.4 percent.
The 10-year US Treasury note, which hit a 16-year peak on Tuesday, retreated after a lacklustre US hiring report from payroll firm ADP, which raised hopes the Fed might not keep rates elevated for too long.
Positive sentiment spilled over into Asia, with Tokyo jumping 1.8 percent by the close.
Hong Kong ended marginally higher, while markets in mainland China were shut for a week-long holiday.
“The US market saw gains driven by weak economic data, alleviating worries about prolonged elevated interest rates,” said Stephen Innes, managing partner at SPI Asset Management.
“As a result, Asian markets responded with a risk-friendly bounce.”
World oil prices extended losses after tumbling following news of a jump in petrol stockpiles in the United States.
Brent slumped Wednesday by almost six percent and WTI shed five percent after the news, which signals weaker demand in the key consuming nation.
Worries that high interest rates will start weighing on economic growth also sent crude prices lower.
“Oil prices remain under pressure today after suffering the biggest one-day drop in over a year,” said Victoria Scholar, head of investment at online trading firm Interactive Investor.
– Key figures around 1050 GMT –
London – FTSE 100: UP 0.5 percent at 7,449.35 points
Frankfurt – DAX: UP 0.1 percent at 15,110.44
Paris – CAC 40: UP 0.1 percent at 7,000.86
EURO STOXX 50: UP 0.2 percent at 4,107.23
Tokyo – Nikkei 225: UP 1.8 percent at 31,075.36 (close)
Hong Kong – Hang Seng Index: UP 0.1 percent at 17,213.87 (close)
Shanghai – Composite: Closed for a holiday
New York – Dow: UP 0.4 percent at 33,129.55 points (close)
Euro/dollar: UP at $1.0507 from $1.0504 on Wednesday
Dollar/yen: DOWN at 148.96 yen from 149.12 yen
Pound/dollar: DOWN at $1.2128 from $1.2135
Euro/pound: UP at 86.63 pence from 86.55 pence
Brent North Sea crude: DOWN 1.1 percent at $84.83 per barrel
West Texas Intermediate: DOWN 1.2 percent at $83.24 per barrel
burs-rfj/js
