Global stocks follow Wall St higher on interest rate hopes

A person wearing a protective mask walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, March 3, 2023, in Tokyo. Asian stock markets followed Wall Street higher Friday after a Federal Reserve official raised hopes the U.S. central bank might not step up its anti-inflation fight as much as feared. (AP Photo/Eugene Hoshiko)
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BEIJING (AP) — Global stock markets advanced Friday after a Federal Reserve official raised hopes the U.S. central bank might not step up its anti-inflation fight as much as feared.

London, Shanghai, Frankfurt and Tokyo gained. Oil prices edged higher.

Wall Street rose Thursday for the first time in three days after the president of the Federal Reserve Bank of Atlanta, Raphael Bostic, expressed support for raising the Fed’s key lending rate less than many investors are forecasting. Bostic said the Fed might be able to suspend additional rate increases by mid-year, sooner than some expect.

Stocks advanced following those “dovish comments,” said Anderson Alves of ActivTrades in a report.

In early trading, the FTSE 100 in London rose 0.3% to 7,969.52. The DAX in Frankfurt advanced 0.9% to 15,463.70 and the CAC 40 in Paris gained 0.7% to 7,284.22.

On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were down 0.1%.

On Thursday, the S&P 500 rose 0.8%, rebounding from a loss early in the day, after Bostic expressed support for raising the Fed’s benchmark lending rate to a range of 5% to 5.25%.

That countered comments by other Fed officials who say rates might have to be raised more and stay elevated longer to extinguish stubborn inflation after job growth, consumer spending and price rises were stronger than expected.

The Dow added 1% and the Nasdaq composite gained 0.7%.

In Asia, the Shanghai Composite Index rose 0.5% to 3,326.92 after a central bank official said China’s vast real estate industry was recovering from a slump triggered by debt controls that led to a wave of defaults by developers, rattling global financial markets.

The official, Pan Gongsheng, mentioned Evergrande Group, the global real estate industry’s most heavily indebted developer. But he gave no update on government-supervised efforts to restructure its $310 billion in debt.

The Nikkei 225 in Tokyo gained 1.6% to 27,934.01 after Japan’s unemployment rate edged lower in January.

The Hang Seng in Hong Kong gained 1.2% to 20,555.46 and the Kospi in Seoul was 0.2% higher at 2,432.07.

Sydney’s S&P-ASX 200 added 0.4% to 7,282.20 and India’s Sensex rose 1.6% to 59,834.42. New Zealand, Bangkok and Jakarta declined while Singapore advanced.

Data on Thursday showed fewer Americans applied for unemployment benefits last week despite interest rate hikes to cool business activity. That is positive for workers, but the Fed worries strong employment might fuel inflation.

Traders have raised forecasts of how high the Fed will raise rates and for how long.

Treasury yields, which respond to expectations of Fed policy, widened again Thursday.

The yield on the 10-year Treasury, or the difference between its market price and payout at maturity, widened to 4.06% from 4.00% late Wednesday and from less than 3.40% earlier this year. It is near its highest level in four months.

The two-year yield rose to 4.90% from 4.88%. It is close to a 16-year high.

Investors also are cutting expectations of U.S. corporate profits due to warnings inflation and interest rates might cool consumer demand.

In energy markets, benchmark U.S. crude edged up 3 cents to $78.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents on Thursday to $78.16. Brent crude, the price basis for international oil trading, advanced 5 cents to $84.80 per barrel in London. It gained 44 cents the previous session to $84.75.

The dollar declined to 136.33 yen from Thursday’s 136.76 yen. The euro gained to $1.0618 from $1.0590.