Berliner Tageblatt - European, US stocks stage rebound

Most Asian stocks dipped Thursday in line with Wall Street on Wednesday, after minutes from the US Federal Reserve's December meeting dampened hopes for an early interest-rate cut.

But European stocks gradually shrugged off the negative sentiment and ended the day with gains of around half a percentage point.

After opening mixed, Wall Street's main indices were all higher in late morning trading.

"It hasn’t been a wonderful start to 2024, but despite a more hawkish set of Fed minutes markets have managed to edge higher on both sides of the Atlantic," said Chris Beauchamp, chief market analyst at online trading platform IG.

Oil prices at first rallied further on supplies worries.

"With Western nations threatening more forceful actions to defend shipping in the Red Sea, the situation was looking tense even before yesterday's explosions in Iran," noted Steve Clayton, head of equity funds at UK stockbroker Hargreaves Lansdown.

Twin bomb blasts on Wednesday ripped through a crowd commemorating Revolutionary Guards general Qasem Soleimani, who was killed four years ago in a US strike in Iraq, killing 84 people.

Meanwhile, "the Israeli/Hamas conflict rages on, leaving oil traders increasingly wary of the security of supplies from the region," Clayton added.

But oil prices later dropped sharply after data showed US petrol stocks jumped last week, a sign of tepid demand.

- Stocks rally fades -

A global rally for equities that characterised the last months of 2023 has petered out on concerns that the buying may have run ahead of itself.

The selling pressure was enhanced Wednesday when the Fed minutes showed officials expect to keep US interest rates elevated for some time as they want to make sure they have inflation under control.

That dealt a blow to confidence on trading floors, where investors had been betting on a cut as soon as March after the US central bank's post-meeting statement last month showed they envisioned three reductions in 2024.

Officials were keen to begin cutting this year but gave no indication of when.

"The trouble is that the markets are pricing in up to 150 basis points-worth of rate cuts this year, double the Fed's forecast," said market analyst David Morrison at Trade Nation.

"Consequently, there's plenty of scope for disappointment."

Briefing.com analyst Patrick O'Hare noted that yields on US government bonds have risen following the publication of the Fed minutes on "rate-cut angst".

Data released Thursday showed the US private sector added more jobs than anticipated in December, but wage growth slowed.

While the job creations "came in solidly above expectations, it nonetheless represented a slowdown from November’s figure, reinforcing hopes that the Fed is on course to cut rates in the first half of the year," said IG's Beauchamp.

Focus now turns to the release of key non-farm payrolls data due on Friday.

"The US unemployment situation is a key factor in the outlook for inflation," said Morrison.

The yen continued its post-quake slide, dropping more than one percent against the dollar and euro before paring losses.

- Key figures around 1630 GMT -

New York - Dow: UP 0.7 percent at 37,695.69 points

New York - S&P 500: UP 0.4 percent at 4,722.78

New York - Nasdaq: UP 0.1 percent at 14,611.66

London - FTSE 100: UP 0.5 percent at 7,723.07 (close)

Paris - CAC 40: UP 0.5 percent at 7,450.63 (close)

Frankfurt - DAX: UP 0.5 percent at 16,617.29 (close)

EURO STOXX 50: UP 0.6 percent at 4,474.01 (close)

Tokyo - Nikkei 225: DOWN 0.5 percent at 33,288.29 (close)

Hong Kong - Hang Seng Index: FLAT at 16,645.98 (close)

Shanghai - Composite: DOWN 0.4 percent at 2,954.35 (close)

Euro/dollar: UP at $1.0961 from $1.0922 on Wednesday

Dollar/yen: UP at 144.53 yen from 143.29 yen

Pound/dollar: UP at $1.2695 from $1.2665

Euro/pound: UP at 86.31 pence from 86.23 pence

West Texas Intermediate: DOWN 2.2 percent at $71.12 per barrel

Brent North Sea Crude: DOWN 2.2 percent at $76.57 per barrel

burs-rl/bp

M.Odermatt--BTB