Global stocks gain as investors shrug off pessimistic data

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BANGKOK — Stocks were higher in Europe and Asia on Friday despite data suggesting some economies are slowing.

U.S. futures also rose after a Thursday rally on Wall Street, where the market is heading for its first weekly gain after three weeks of punishing losses.

Market participants are eagerly awaiting US inflation data due next week and hoping that the moderation in oil prices and some other commodities this week is a sign that inflation may ease.

“We’ll soon know if the inflation trade stalls or cracks. Pain levels rise with the ‘recession spin’ in full swing as the narrative shifts from supply chain concerns to the destruction of demand,” Stephen Innes of SPI Asset Management said in a comment.

Britain’s FTSE 100 added 1.1% to 7,097.20 after Prime Minister Boris Johnson suffered a double hit as voters rejected his conservative party in two special elections dominated by questions about his leadership and ethics.

The election tests came as Britain faces its worst cost of living crisis in a generation, with Russia’s war in Ukraine cutting energy and basic food supplies at a time when the consumer demand soars as the coronavirus pandemic recedes.

The German DAX rose 0.6% to 12,985.33 and the CAC 40 in Paris jumped 1.4% to 5,966.79. The S&P 500 future rose 0.7% while that of the Dow Industrials gained 0.6%.

Manufacturer survey results from “several developed economies came in below expectations in the manufacturing and service sectors, indicating a broad-based moderation in economic activities,” IG’s Jun Rong Yeap said in a commentary.

Tokyo’s Nikkei 225 added 1.2% to 26,491.97 and Seoul’s Kospi jumped 2.3% to 2,366.60. Hong Kong’s Hang Seng rose 2.1% to 21,719.06 and the Shanghai Composite Index added 0.9% to 3,349.75.

In Australia, the S&P/ASX 200 gained 0.8% to 6,578.70. Shares also rose in India and Taiwan.

A report on Friday showed inflation in Japan remained at 2.1% in May, pushed higher by energy costs and a weaker currency. However, core inflation, which excludes volatile energy and fresh food costs, remained at 0.8% and the central bank is unlikely to follow the lead of the US Federal Reserve and others. central banks in raise interest ratesanalysts said.

The Bank of Japan “is not confident this will be sustainable as wage growth remains weak and rising energy costs weigh on corporate earnings and consumer sentiment,” said Capital Economics’ Marcel Thieliant. in a report.

Thursday’s session on Wall Street was dominated by another round of testimony before Congress by Federal Reserve Chairman Jerome Powell, who told a House committee that the Fed hopes to rein in the worst inflation in four decades without plunging the economy into a recession.

But he acknowledged that “this path has become more and more difficult”.

The S&P 500 ended up 1% and the Dow Jones Industrial Average rose 0.6%. The Nasdaq gained 1.6%, while the Russell 2000 rose 1.3%.

Trading has been turbulent in recent weeks as investors try to determine if a recession is looming. The benchmark S&P 500 index is currently in a bear market. This means that it has fallen more than 20% from its most recent peak, which was in January. The index has fallen for 10 of the past 11 weeks.

Powell addressed Congress a week after the Fed raised its benchmark interest rate three-quarters of a percentage point, its greatest hike in nearly three decades.

As higher prices stretch their budgets, consumers are shifting their spending from big items like electronics to basic necessities. The pressure has been compounded by record high gasoline prices which show no signs of abating.

Early Friday, benchmark U.S. crude oil rose 81 cents to $105.08 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international trade, rose 60 cents to $107.06 a barrel.

The yield on the 10-year Treasury note, which helps to fix mortgage ratesfell to 3.08% from 3.15% on Wednesday evening.

The US dollar weakened to 134.91 Japanese yen from 134.94 yen. The euro fell from $1.0524 to $1.0543.

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