NEW YORK (AFP) – Buoyant big tech earnings lifted United States (US) stocks on Friday while London scaled another peak as investors tracked a series of takeover bids for United Kingdom (UK) companies.
The tech heavy Nasdaq led the way on Wall Street, adding more than two per cent as traders shrugged off official data showing that a key measure of inflation favoured by the US Federal Reserve (Fed) had accelerated in March.
The broader-based S&P added one per cent while the Dow was 0.4 per cent in the green as major European indices also rose.
The markets had fallen on Thursday over concerns about spending at Facebook owner Meta and slower-than-expected US economic growth in the first quarter.
But the mood changed after Microsoft and Google owner Alphabet released forecast-beating earnings after markets closed on Thursday, soothing worries that a tech-fueled global markets rally might have been overdone.
Shares in Alphabet, which had announced a dividend and the authorisation of USD70 billion in share buybacks, charged 10 per cent higher in Friday’s session.
Microsoft rose 1.8 per cent after reporting a 20-per-cent jump in quarterly profits to USD21.9 billion.
“What a difference a day makes, or even five minutes,” said analyst at Trade Nation David Morrison.
Investors were also digesting the personal consumption expenditures (PCE) price index, which rose more than expected at an annual rate of 2.7 per cent in March after reaching 2.5 per cent in February.
That figure pushes back the chances of interest rate cuts this summer.
The Fed holds a policy meeting next week. “The latest PCE report reiterates that it’s too early for a victory lap” in the fight against inflation, said eToro analyst Bret Kenwell.
In Europe, London’s benchmark FTSE 100 index crowned a week which saw it advance three percent with a new record high close of 8,139.83 points. A 0.8 advance for the day left it just off a fresh intraday record of 8,146.79.
Frankfurt added 1.4 per cent and Paris 0.9 per cent.
Shares in British multinational mining company Anglo American rose more than two per cent after falling earlier in the day following the company’s rejection of a nearly USD39 billion offer from Australian rival BHP.
Anglo American on Friday dismissed the bid as “highly unattractive” and “opportunistic”.
Cybersecurity firm Darktrace said it had accepted a USD5.3-billion takeover offer from US private equity firm Thoma Bravo, sending its share price shooting higher.
“What a fantastic week for the FTSE 100. We’ve had new record highs, yet more takeover action, and everyone is talking about UK stocks in a positive way,” said investment director at AJ Bell Russ Mould.
“The bidding bonanza for UK-listed firms goes on, and this is acting as a constant reminder to global investors that, even with the FTSE 100 at a record high, UK stocks look cheap compared to their US cousins,” said IG chief market analyst Chris Beauchamp.
In Asia, major equity markets rose, while the yen hit a fresh 34-year low after the Bank of Japan stood pat on interest rates, a month after raising them for the first time in 17 years.
The unit broke 157 to the dollar on Friday, fueling fresh speculation of an intervention after several officials suggested readiness to support it.
