European stock markets rebound at end of painful week

European stock markets recovered slightly on Friday, the end of an extremely volatile week, as investors weighed the outlook for China-US trade talks and oil production, while looking ahead to the release of key US jobs data

LondonUnited Kingdom – The dollar was higher versus the euro, pound and yen, while oil prices steadied awaiting an OPEC announcement on output levels.

Around 1130 GMT, London’s benchmark FTSE 100 index was up 1.4 percent, having closed down almost 3.5 percent Thursday.

Tokyo closed 0.8 percent higher Friday, Shanghai ended flat and Hong Kong finished down 0.4 percent after a late sell-off.

“European stocks have rallied… following the impressive comeback that US markets underwent last night,” noted David Madden, market analyst at CMC Markets UK.

“The huge swing we saw in US markets yesterday underlines the volatility in markets, and that nervousness still exists.”

He added: “One good morning doesn’t make up for the dismal week… and some investors are likely to be playing the wait-and-see game until the US jobs report is released later today.”

After the furious selling of the past two days, there was some optimism after a report said the Federal Reserve could slow down its pace of interest rate hikes next year, providing some much-needed relief to under-pressure dealers.

– Uncertainty over China deal –

The general mood across trading floors is of unease, just days after the euphoria of US President Donald Trump’s tariffs ceasefire deal with Chinese counterpart Xi Jinping at the G20 that put the row off for 90 days while they try to resolve the crisis.

No sooner had the rally from that announcement run its course than questions began to be raised about the details and whether the world’s top two economies could actually resolve their differences.

That was compounded by news that a top executive at Chinese telecoms giant Huawei had been arrested in Canada and faces extradition to the US over allegations the firm had broken sanctions linked to Iran.

The arrest of Meng Wanzhou fuelled concerns about already fraught relations between Washington and Beijing and the future of the trade talks.

China on Thursday appeared to try to ease concerns by saying it would “immediately” implement measures agreed under the truce, while Trump later sent a tweet highlighting progress.

Providing some support were hopes the Fed will not hike borrowing costs as much as previously expected over the next year.

A report in the Wall Street Journal said the bank would take a wait-and-see approach to its decisions as signs point to a possible slowdown in the world’s top economy.

The prospect of rates continuing to rise for some time — making it more expensive to borrow to invest in stocks — has been a major reason for selling on world markets this year.

Federal Reserve head Jerome Powell, who has grown more dovish in recent weeks, remains upbeat and attention will focus on the release of key non-farm payrolls figures Friday.

– Key figures around 1130 GMT –

London – FTSE 100: UP 1.4 percent at 6,799.40 points

Frankfurt – DAX 30: UP 0.6 percent at 10,876.59

Paris – CAC 40: UP 1.4 percent at 4,845.93

EURO STOXX 50: UP 1.1 percent at 3,079.30

Tokyo – Nikkei 225: UP 0.8 percent at 21,678.68 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 26,063.76 (close)

Shanghai – Composite: FLAT at 2,605.89 (close)

New York – Dow Jones: DOWN 0.3 percent at 24,947.67 (close)

London – FTSE 100: UP 0.8 percent at 6,755.44

Euro/dollar: DOWN at $1.1372 from $1.1381 at 2130 GMT

Dollar/yen: UP at 112.79 yen from 112.69

Pound/dollar: DOWN at $1.2761 from $1.2783

Oil – Brent Crude: UP 31 cents at $60.37 per barrel

Oil – West Texas Intermediate: DOWN 16 cents at $51.33