Prices paid at China's factory gates have risen at the highest rate in a quarter of a century owing to surging demand and spiking commodity costs

New York (AFP) - Global stock markets rose Thursday, boosted by a healthy start to the US earnings season as more big-name firms report results and investors put aside concerns over soaring inflation.

Oil rebounded after the International Energy Agency lifted global demand forecasts – and cited shortages of natural gas and coal that are sparking a switch to crude.

Wall Street equities were in the green the entire day while stock markets in London, Paris and Frankfurt all advanced as investors digested earnings reports from major US banks.

“These results could set the stage for what to expect in the coming weeks of earnings season and could give an indication of how institutions performed recently, as rising costs and uncertainty in markets worried investors,” said XTB analyst Walid Koudmani.

New applications for US unemployment benefits dipped below 300,000 last week for the first time since Covid-19 sent them skyrocketing into the millions early last year, the Labor Department said.

Morgan Stanley beat expectations with record revenues, while both Bank of America and Citigroup saw a jump in profits as they clawed back provisions made at the start of the pandemic.

Those results followed a broadly positive start for the US earnings season on Wednesday when JPMorgan Chase’s third-quarter earnings beat expectations and Delta Air Lines posted a profitable third quarter despite warning over the impact of fuel prices.

- Inflation narrative -

“Earnings season gives investors a chance to ignore some of the noise and market narratives and get into actual numbers,” added analyst Neil Wilson.

“Only this time we expect the corporate reporting season to underline the inflation narrative.”

US wholesale prices jumped 8.6 percent in the 12 months ended in September, government data showed Thursday, the biggest increase in over a decade, as companies passed on higher food and energy prices.

“Rising oil and gas prices are once again putting pressure on energy intensive industries, forcing them to cut production in the face of spiralling costs and creating supply shortages,” said market analyst Michael Hewson at CMC Markets UK.

He pointed to Belgian metals supplier and manufacturer Nyrstar slashing output by 50 percent at three of its European zinc smelters, as well as aluminium prices hitting levels unseen since 2008 and copper at a three-month high.

After a year and a half of ultra-loose monetary policies from the world’s central banks, which helped spur a rebound from the pandemic collapse and sent equities flying, concerns about consistently high price rises are forcing officials to tighten.

Several have already started – including South Korea and New Zealand, with Singapore joining in on Thursday – but all eyes are on the Federal Reserve, with minutes from its most recent meeting showing it plans to move either next month or in December.

On Thursday, China said factory gate inflation had in September hit its highest level in a quarter of a century owing to a spike in commodity costs and rocketing demand as economies reopen.

And with China a crucial exporter to the world, there are concerns the rises will transfer to other economies.

- Key figures around 2040 GMT -

New York - Dow: UP 1.6 percent at 34,912.56 (close)

New York - S&P 500: UP 1.7 percent at 4,438.26 (close)

New York - Nasdaq: UP 1.7 percent at 14,823.43 (close)

London - FTSE 100: UP 0.9 percent at 7,207.71 (close)

Frankfurt - DAX: UP 1.4 percent at 15,462.72 (close)

Paris - CAC 40: UP 1.3 percent at 6,685.21 (close)

EURO STOXX 50: UP 1.6 percent at 4,149.06 (close)

Tokyo - Nikkei 225: UP 1.5 percent at 28,550.93 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,558.28 (close)

Hong Kong - Hang Seng Index: Closed for holiday

Euro/dollar: UP at $1.1601 from $1.1594 at 2100 GMT

Pound/dollar: UP at $1.3674 from $1.3659

Euro/pound: DOWN at 84.80 from 84.88 pence

Dollar/yen: UP at 113.67 yen from 113.25 yen

Brent North Sea crude: UP 1.0 percent at $84.00 per barrel

West Texas Intermediate: UP 1.1 percent at $81.31 per barrel