Global Shares Rise as Investors Eye US Fed Moves, Inflation

TOKYO (AP) -- Global shares were trading higher Friday as investors eyed the war in Ukraine and what the world's central banks might do to keep inflation in check.

Benchmarks rose in Paris, London and Frankfurt after Asian markets finished higher. Oil prices rose.

Investors have been weighing the latest updates from the U.S. Federal Reserve amid concerns about rising inflation. The Fed has signaled it is prepared to keep raising interest rates and reducing its stockpile of bonds and mortgage-backed securities in order to rein in the highest inflation in 40 years.

"Global appetite for risk in the short-term is still uncertain, with hawkish central banks weighing on sentiment. The situation between Ukraine and Russia continues to be a headwind, with markets now only looking for a major breakthrough to adjust current pricing," Anderson Alves at ActivTrades said in a commentary.

France's CAC 40 jumped 1.6% in early trading to 6,563.68, while Germany's DAX surged 1.6% to 14,295.95. Britain's FTSE 100 added 1.0% to 7,627.10. On Wall Street, the futures for the Dow Jones Industrial Average and the S&P 500 rose 0.4%.

Japan's benchmark Nikkei 225 declined in morning trading but finished 0.4% higher at 26,985.80. South Korea's Kospi rose 0.2% to 2,700.39. Australia's S&P/ASX 200 added 0.5% to 7,478.00. Hong Kong's Hang Seng gained 0.3% to 21,872.01, while the Shanghai Composite also recouped earlier losses, climbing 0.5% to 3,251.85.

On Thursday, the S&P 500 rose 0.4% and the Dow industrials gained 0.3%. The Nasdaq composite added 0.1% to 13,897.30.

The U.S. central bank is reversing course from low interest rates and the extraordinary support it began providing for the economy two years ago when the pandemic knocked the economy into a recession. It already announced a quarter-percentage-point increase and is expected to keep raising rates throughout the year.

Traders are now pricing in a nearly 80% probability the Fed will raise its key overnight rate by half a percentage point at its next meeting in May. That's double the usual amount and something the Fed hasn't done since 2000.

Persistently rising inflation has been threatening economic growth. Business have been raising prices on everything from food to clothing and that has put more pressure on consumers. Some companies have been unable to offset the impact from inflation, even with price hikes.

Wall Street is concerned about consumers eventually pulling back on spending as higher prices become too difficult to digest. Price increases were responsible for a rise in consumer spending in March. Otherwise, the results revealed a pullback.

A rapid increase in interest rates could also affect corporate earnings growth, though gauging that depends on how aggressive the Fed will be.

Russia's invasion of Ukraine has also added to concerns about inflation. Energy prices have been particularly volatile and pushed gasoline prices higher.

U.S. benchmark crude added $1.17 to $97.20 per barrel in electronic trading on the New York Mercantile Exchange. It fell 0.2% on Thursday, but remains up roughly 31% for the year. Brent crude, the international standard for pricing, rose $1.01 to $101.59 a barrel.

Investors received an encouraging update on the job market Thursday. The U.S. Labor Department reported that fewer Americans applied for unemployment benefits last week as layoffs remain at historically low levels.

In currency trading, the dollar edged up to 124.10 Japanese yen from 123.97 yen. The euro rose to $1.0864 from $1.0861.