London (AFP) - Global stocks markets moved in different directions on Friday as investors weighed a cooler inflation environment against recession risks, and waited for the latest signals on interest rate cuts.

On Wall Street, the S&P 500 and Nasdaq slid lower at the opening bell, while the Dow was flat. Europe’s main markets were higher in afternoon trading after Asian indices closed mixed.

There are growing expectations that the Federal Reserve will cut US interest rates in the first half of 2024 thanks to a string of data suggesting its tightening cycle is finally getting price rises under control.

Traders were awaiting a speech due on Friday from Fed chairman Jerome Powell, hoping for guidance on the bank’s rate plans.

Briefing.com analyst Patrick O’Hare put the lacklustre start on Wall Street down to caution about what Powell might say.

“There is likely some hesitation in play in front of Fed Chair Powell’s discussion during a fireside chat at Spelman College today,” he said.

“Recent gains have been partially predicated on the idea that the Fed will cut rates sooner rather than later, so market participants will be keenly focused on Mr. Powell’s tone today,” he added.

While officials have welcomed the inflation data, they have been reluctant to call an end to more than a year of rate hikes just yet, warning that prices could flare up again.

“It is still too early to eliminate the tightening bias in the Fed’s forward guidance,” said Brian Rose at UBS Global Wealth Management.

“We expect (Powell) to be careful to avoid sounding too dovish.”

The latest US data released on Thursday showed the Fed’s preferred gauge of inflation slowed further in October, while other recent data pointed to a softening in US consumer spending and the labour market.

This has led to rising hopes of the Fed achieving a so-called soft-landing for the economy – hiking interest rates to reduce inflation, while causing a slowdown in the economy but not a recession.

Stephen Innes at SPI Asset Management said investors were “recognising the Federal Reserve’s successful management of inflation without inducing a severe recession, a concern that was a massive part of the 2023 narrative”.

Data this week also showed eurozone inflation came in lower than forecast, giving the European Central Bank room to pause on rates and consider cutting next year.

The outlook was less clear in Britain, where the rate of annual inflation remains the highest among G7 rich nations.

Bank of England officials have indicated that they do not see UK rate cuts any time soon, helping to boost the pound against main rivals.

The ongoing weakness in China’s economy remains a problem, even as authorities move to put in place measures to kick-start growth.

“There’s still a lot of pessimism – there’s still a wait-and-see attitude,” said James Fletcher of Ethos Investment Management.

Still, analysts remain positive about the global equity outlook.

Innes that “uncertainties persist amid geopolitical risks such as Russia/Ukraine tensions, Middle East dynamics, the upcoming US presidential election, and the lagged effects of prolonged higher interest rates”.

Oil prices slid further following Thursday’s losses that were caused despite a deal between OPEC and Russia-led allies to further cut crude oil output.

The grouping said they would further reduce production in the new year, while Saudi Arabia would also extend an ongoing cut.

But observers said the measures were voluntary and it remained to be seen whether members – particularly Russia and some African countries who had hit back at initial calls for a cut – would stick to their pledges.

“The absence of a comprehensive breakdown with only a select number of countries detailing their reduction failed to convince the market,” noted analysts at ANZ Group Holdings.

- Key figures around 1430 GMT -

New York - Dow: FLAT at 35,941.03 points

London - FTSE 100: UP 0.5 percent 7,488.98

Paris - CAC 40: UP less than 0.1 percent at 7,317.69

Frankfurt - DAX: UP 0.5 percent at 16,293.74

EURO STOXX 50: UP 0.4 percent at 4,398.23

Tokyo - Nikkei 225: DOWN 0.2 percent at 33,431.51 (close)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 16,830.30 (close)

Shanghai - Composite: UP 0.1 percent at 3,031.64 (close)

Euro/dollar: DOWN at $1.08 from $1.0889 on Thursday

Pound/dollar: UP at $1.26 from $1.2621

Dollar/yen: DOWN at 148. yen from 148.14 yen

Euro/pound: DOWN at 86. pence from 86.22 pence

Brent North Sea crude: DOWN 0.4 percent at $80.55 per barrel

West Texas Intermediate: DOWN 0.3 percent at $75.75 per barrel

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