London stocks were lifted by data showing UK retail sales rose 0.6 percent in October

London (AFP) - Stock markets in the United States and Europe rallied on Friday as investors fished for bargain shares and shrugged off losses elsewhere, but oil prices dropped as concerns over the global economy persist.

London stocks were lifted by official data showing UK retail sales rose 0.6 percent in October, rebounding from a 1.5-percent slump in September.

The news boosted the pound, which had fallen the previous day on a harsh government budget and confirmation Britain was in recession.

The main European indices closed in the green.

London was up 0.5 percent, while Frankfurt and Paris jumped 1.2 and 1.0 percent in value respectively.

The pound also rebounded after a sharp fall against the dollar on Thursday.

But others cautioned against getting too excited by the UK retail data since the country is in the grip of a worsening cost-of-living crisis.

“It is not the start of a promising trend,” said Craig Erlam at OANDA online trading platform.

The Dow Jones was also up 0.6 percent, buoyed by earnings reports from retail companies including Gap and Foot Locker.

“Their good news/better-than-feared news has mitigated some of the weakness seen earlier this week following Target’s (TGT) disappointment,” said Briefing.com analyst Patrick J O’Hare.

But with worries about the world’s economy and rising coronavirus cases in China, the price of the main US crude oil contract, WTI, tumbled on Friday below $80 per barrel for the first time since the end of September.

The main international oil contract, Brent crude, also fell by nearly three percent Friday around 1630 GMT.

- Fears abound -

Asian equities experienced mixed fortunes on Friday as cautious investors tried to gauge the outlook for Federal Reserve monetary policy, after several officials tempered optimism over signs that inflation is slowing in the world’s biggest economy.

While the week has been broadly positive for global equities following softer-than-expected US consumer and wholesale price figures, a strong reading on retail sales and jobless claims showed plenty of resilience to higher interest rates.

With that in mind, St Louis Fed President James Bullard warned more hikes were needed to bring inflation down from four-decade highs, adding that US interest rates might need to go as high as seven percent.

That was followed by Minneapolis Fed boss Neel Kaskari saying he had not witnessed much evidence that underlying demand was cooling and did not want to forecast when the tightening would end.

The comments came after a similar message from other policymakers, who have sought to calm markets, which soared in the wake of last Thursday’s consumer prices reading.

They also fuelled fears among traders that the sharp rate-hiking campaign – including four bumper 0.75-point increases in a row – would tip the US economy into recession.

“Investors seem continually surprised by the Fed merely repeating its mantra,” said Interactive Investor analyst Richard Hunter.

“Rates are likely to continue rising… and may well stay higher until such time as a sustained slowdown in inflation is evident.”

- Key figures around 1630 GMT -

New York - Dow: UP 0.6 percent at 33,746.54 points

EURO STOXX 50: UP 1.2 percent at 3,924.84

London - FTSE 100: UP 0.5 percent at 7,385.52 (close)

Paris - CAC 40: UP 1.0 percent at 6,644.46 (close)

Frankfurt - DAX: UP 1.2 percent at 14,431.86 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 27,899.77 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 17,992.54 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,097.24 (close)

Pound/dollar: UP at $1.1931 from $1.1864 on Thursday

Euro/dollar: UP at $1.0368 from $1.0362

Dollar/yen: DOWN at 139.87 yen from 140.20 yen

Euro/pound: DOWN at 86.88 from 87.34 pence

Brent North Sea crude: DOWN 2.7 percent at $87.31 per barrel

West Texas Intermediate: DOWN 2.8 percent at $79.34 per barrel

burs-raz/gil