NEW YORK CITY: Global stocks mostly rose Thursday (Friday in Manila) as investors digested data showing a softening of US consumer inflation, potentially giving the Federal Reserve (Fed) room to slow its interest rate hikes.
Equities also found support on growing optimism over China's economic reopening.
Europe's main bourses surpassed levels not seen in months.
Paris closed 0.7 percent higher after briefly rising past the 7,000-point mark for the first time since February last year, while Frankfurt ended above 15,000 points for the first time since the same month.
Shares in London were 0.9 percent higher. On Wall Street, major indices shook off early weakness and also finished higher. Both the Dow and Nasdaq ended the session up 0.6 percent.
After inflation soared to decades-high levels in the last year, investors had been keenly awaiting the latest US consumer price index (CPI) reading for an indication of the Fed's next move.
It showed consumer inflation in the United States slipped in December to the lowest level in over a year — rising 6.5 percent from a year ago, the smallest increase since October 2021, the Labor Department said.
The annual figure was also down from November's 7.1-percent spike.
Between November and December, CPI dipped 0.1 percent, the first time in around two years it logged a month-on-month contraction.
"While the job picture remains strong, the Fed will be pleased to see that the inflation outlook is getting better, too," Chris Beauchamp, chief market analyst at online trading platform IG, said.
Several analysts issued reports predicting the Fed would raise interest rates by a quarter percentage point in February, down from the half-percentage point hike in December.
But Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said Fed officials still faced "a super-tricky balancing act."
"Expectations remain that the Fed will opt for a 0.25-percent hike at the next meeting, but a steeper 0.5-percent jump still can't be ruled out as core inflation which strips out volatile energy and food prices is still proving a much tougher nut to crack," she said.
Oil prices rise
Investors are also keeping tabs on developments in China as it emerges from years of strict zero-Covid containment measures.
While the long-term outlook remains positive, soaring infections across the country are leading to worries about the effect on economic activity.
World oil prices also jumped on expectations of rebounding Chinese energy demand, rising for a sixth straight day.
"Energy traders should get used to seeing oil prices head higher," said Oanda analyst Edward Moya. "Oil demand is coming back and expectations are high that China's demand is about to skyrocket."
Several oil experts have tipped prices to hit $100 a barrel this year, with top hedge fund manager Pierre Andurand predicting last week that it could pass $140.
Key figures around 2145 GMT
New York - Dow: UP 0.6 percent at 34,189.97 (close)
New York - S&P 500: UP 0.3 percent at 3,983.17 (close)
New York - Nasdaq: UP 0.6 percent at 11,001.10 (close)
London - FTSE 100: UP 0.9 percent at 7,794.04 (close)
Frankfurt - DAX: UP 0.7 percent at 15,058.30 (close)
Paris - CAC 40: UP 0.7 percent at 6,975.68 (close)
EURO STOXX 50: UP 0.7 percent at 4,126.68 (close)
Tokyo - Nikkei 225: FLAT at 26,449.82 (close)
Hong Kong - Hang Seng Index: UP 0.4 percent at 21,514.10 (close)
Shanghai - Composite: UP 0.1 percent at 3,163.45 (close)
Euro/dollar: UP at $1.0854 from $1.0757 on Wednesday
Dollar/yen: DOWN at 129.27 yen from 132.45 yen
Pound/dollar: UP at $1.2214 from $1.2146
Euro/pound: UP at 88.84 pence from 88.56 pence
Brent North Sea crude: UP 1.6 percent at $84.03 a barrel
West Texas Intermediate: UP 1.3 percent at $78.39 a barrel.