World stocks mostly rise on recovery hopes before inflation data

Global stock markets mostly rallied Wednesday as investors were buoyed by optimism over China's reopening and looming data expected to show a further slowdown in US inflation.

Investors brushed off warnings that US interest rates would continue to rise, as well as the World Bank's downgrade to its global growth forecast.

Asian and European equities mainly fizzed higher after impressive New York gains rooted in the tech sector.

"Markets were relatively upbeat with a good showing on Wall Street last night which spilled over into a positive sentiment among investors in European stocks," said Russ Mould, investment director at stockbroker AJ Bell.

After wavering on Tuesday, markets resumed the upward push that has characterised the start of the year thanks to China's emergence from nearly three years of zero-Covid isolation.

The reopening, easing of Beijing's tech crackdown and moves to help the property sector have raised hopes for the world's number-two economy, a crucial driver of world growth.

"Many investors are starting to believe China's reopening could be faster than expected on pent-up demand, a robust economic rebound and fewer supply constraints," noted SPI Asset Management analyst Stephen Innes.

Focus this week is on Thursday's US consumer price index, which is expected to show that price gains eased further in December.

But while that could possibly allow the Federal Reserve to take a lighter approach to its monetary tightening campaign, policymakers continue to push back against any pivot away from rate hikes.

In London on Wednesday, shares in JD Sports topped the FTSE 100 index, jumping more than six per cent after the retailer posted upbeat Christmas sales.

But Sainsbury dropped 1.6 per cent after the supermarket group also logged rising festive sales — but cautioned over the impact of the cost-of-living crisis.

Housebuilder Barratt Developments meanwhile slid 0.5 per cent after it warned of a "marked slowdown" in the UK housing market, hit partly by economic uncertainty and rising home loan interest rates.

And cyber security firm Darktrace saw its share price tank more than 14 per cent after cutting its annual revenue forecast due to the souring economic climate.

London - FTSE 100: UP 0.7 per cent at 7,744.15 points

Frankfurt - DAX: UP 1.2 per cent at 14,950.50

Paris - CAC 40: UP 1.0 per cent at 6,937.54

EURO STOXX 50: UP 1.1 per cent at 4,103.25

Tokyo - Nikkei 225: UP 1.0 per cent at 26,446.00 (close)

Hong Kong - Hang Seng Index: UP 0.5 per cent at 21,436.05 (close)

Shanghai - Composite: DOWN 0.2 per cent at 3,161.84 (close)

New York - Dow: UP 0.6 per cent at 33,704.10 (close)

Euro

dollar: UP at $1.0752 from $1.0733 on Tuesday

Dollar

yen: UP at 132.57 yen from 132.26 yen

Pound

dollar: DOWN at $1.2128 from $1.2154

Euro

pound: UP at 88.65 pence from 88.32 pence

Brent North Sea crude: UP 0.6 per cent at $80.56 a barrel

West Texas Intermediate: UP 0.2 per cent at $75.23

• Business