Global stocks climbed yesterday, buoyed by well-received earnings reports in the US led by banking giant Goldman Sachs and as London reacted calmly to a surge of inflation.
In Europe, Frankfurt, London and Paris equities rallied, as the dollar faltered amid uncertainty about the future path for US interest rate hikes, lifting energy and mining sectors. London’s FTSE 100 rose 0.8% to 7,000.06 points, Frankfurt’s DAX 30 gained 1.2% at 10,631.55  and CAC 40 was up 1.3% at 4,508.91 points at close yesterday.
US data showing inflation rose in September at the fastest pace in five months later prompted the dollar to strengthen on foreign exchange markets.
Asian indices also advanced as investors weighed the prospect of a US rate increase, and on the eve of key economic growth data in China.
“For once, UK stocks and the British pound headed in the same direction,” Jasper Lawler, analyst at CMC markets, said in a note to clients.
“Data showing the highest inflation in the UK for two years catapulted sterling higher but factors other than the currency drove stocks higher too.”
British annual inflation surged to a near two-year high of 1% in September, official data showed, as a tumbling pound raised prices of imported goods and attracted tourists.
Investors are awaiting key events this week that include the last US presidential debate and a European Central bank monetary policy meeting.
But Florence Barjou, responsible for multi-asset investments at Lyxor, said traders also had their sights fixed on any possible rises of US interest rates.
“The main driver on the markets is the interest rate policy of the US Federal Reserve,” she told AFP.
Wall Street rose following a clutch of mostly solid earnings reports, including on-demand television service Netflix surging 19% after subscriber results topped expectations.
Other large companies with big advances after strong earnings reports included Goldman Sachs and UnitedHealth Group.
Meanwhile the US consumer price index rose 0.3% for September on a seasonally adjusted basis, matching analyst expectations, the Labour Department said.
“US stocks opened higher following well-received results from Netflix and Goldman Sachs as well as inflation data showing higher prices and another reason for the Federal Reserve to raise rates this year,” Lawler said.
US monetary policymakers this year have waited for signs of stronger inflation before raising interest rates, but have so far left them unchanged since December at 0.25-0.5%.
US Federal Reserve vice chairman Stanley Fischer said interest rates would likely be suppressed by several factors, including weak economic growth at home and abroad and low corporate investment.
Attention turns to the release today of Chinese third-quarter economic growth figures, with an AFP survey predicting a slowdown from the previous three months.
The figures will be closely watched after last week’s disappointing China trade results were tempered by a better-than-expected inflation reading.
The growth figures will be followed later in the day by the third US debate in a bitter presidential election campaign, while the ECB holds a policy meeting tomorrow.
ECB chief Mario Draghi will be under pressure to clarify the bank’s plans after investors were spooked by talk of an end to its stimulus programme.