HONG KONG — World stock markets rallied Thursday, with Wall Street set to rise further on the open, as investor concerns over inflation appeared to recede. Trading was thin in Asia, where some markets closed for Lunar New Year holidays.
KEEPING SCORE: In Europe, France’s CAC 40 climbed 1.4 percent to 5,239 and Germany’s DAX gained 0.7 percent to 12,421. Britain’s FTSE 100 rose 0.5 percent to 7,251. Futures for the Dow were up 0.9 percent while those for the S&P 500 advanced 0.5 percent.
INFLATION: Investors took in their stride a report showing U.S. consumer prices climbed at a slightly faster pace than expected in January. Surprisingly, markets rose, suggesting investors are now less concerned about inflation than they were earlier this month, when an upbeat wage growth report sent markets reeling over fears the Federal Reserve might start raising interest rates faster than anticipated earlier.
ANALYST TAKEAWAY: “Having just gone through the roller coaster of equity sell-off induced by bond yield rises, I am frankly at a loss to explain what is now happening,” said Rob Carnell, chief Asia economist at ING. “I can only assume that we are in a temporary lull before the turmoil returns,” he added, noting that trading volumes have been lower in recent days, likely because traders are winding down for the Lunar New Year holiday in Asia and President’s Day holiday in the U.S. on Monday.
PROFIT AND LOSS: Investors were also digesting the latest batch of corporate earnings. Shares in European plane maker Airbus jumped 10 percent after it said earnings last year nearly tripled and it expected further gains in deliveries this year despite problems with some jet production programs. Swiss food and beverage giant Nestle reported that its annual profit fell 16 percent in 2017 while revenue was nearly flat. It said it is facing a “challenging environment” in North America and Brazil and its shares were down 2.5 percent.
ASIAN SCORECARD: Japan’s benchmark Nikkei 225 rose 1.5 percent to 21,464.98 and Australia’s S&P/ASX 200 climbed 1.2 percent to 5,909.00. Hong Kong’s Hang Seng advanced 2 percent to close at 31,115.43 in a half-day trading session. Indexes in Southeast Asia, New Zealand and India also rose. Markets in mainland China, South Korea and Taiwan were closed for the lunar new year holiday.
CURRENCIES: The dollar dropped to 106.65 yen from 106.94 yen in late trading Wednesday. The euro strengthened to $1.2485 from $1.2452.
ENERGY: Oil futures fell, with the U.S. benchmark down 25 cents to $60.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.41 on Wednesday. Brent crude, used to price international oils, fell 56 cents to $63.80 a barrel in London.