Stock markets rebounded on Friday after a rocky week dominated by uncertainty over whether the global economy will suffer recession this year as central bankers continue to address inflation.
Major indices in New York, which have been under pressure most of this week, enjoyed a buoyant session, led by tech shares following strong Netflix Inc subscription figures.
The streaming giant reported lower quarterly profits, but Netflix shares surged 8.5 percent after subscriber figures topped analyst estimates, as hits such as Wednesday and Harry & Meghan drew in new viewers.
Analysts also cited comments from US Federal Reserve Governor Christopher Waller endorsing a 25-basis point interest increase at the Fed’s next meeting, smaller than other recent hikes.
“After four or five days of down markets, investors probably feel that most of the bad news is already out and perhaps the selling was overdone,” Cresset Capital Management LLC chief investment officer Jack Ablin said.
All three major US indices rose, with the NASDAQ leading with a 2.7 percent jump.
The gains in New York followed up sessions in Asia and Europe.
In Europe, London stocks closed up 0.3 percent higher, Frankfurt rose 0.8 percent and Paris added 0.6 percent, while Hong Kong led gains in Asia by rising more than 1 percent and breaking 22,000 for the first time since July last year. Tokyo, Shanghai, Singapore, Seoul, Sydney, Mumbai, Jakarta and Wellington also edged up.
“Having seen such a strong start to the year, there was always the probability that we’d see a little bit of profit taking,” CMC Markets UK chief market analyst Michael Hewson said. “However, that doesn’t mean that the ... optimism that has been the hallmark of this early year rebound is evaporating, and that we might start to see a sharp move lower.”
On currency markets, the yen retreated against the US dollar, even as data showed Japanese inflation hit a four-decade high.
Analysts are not convinced that despite rising prices, the Bank of Japan will start to raise interest rates.
Meanwhile, oil prices extended Thursday’s gains as investors focused on the recovery in demand from China. Suggestions that the country’s COVID infections may have peaked added to the optimism among commodity traders.
West Texas Intermediate rose to settle above US$81 a barrel, posting a 1.8 percent weekly gain, while Brent North Sea was up 1.7 percent at US$87.63 a barrel.
“The overarching concerns of a global slowdown remain, even though ... investors are still pinning their hopes on a significant boost from the reopening in China,” Interactive Investor head of markets Richard Hunter said. “This possible division of prospects between Asian and other economies is propping up Chinese markets in particular, albeit amid a rocky start to the year.”
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