Markets rise on better-than-expected US growth / Photo: © AFP/File
Markets rise on better-than-expected US growth
Stock markets rose on Thursday as US data showed the world's top economy grew at a slower pace in 2022 but finished the year on a stronger note.
Shares in Paris, Frankfurt and London were higher in mid-afternoon trading, with the Dow Jones Industrial Average opening higher.
US gross domestic product exceeded expectations to rise at an annual rate of 2.9 percent in the fourth quarter, according to official data.
It marked a second straight quarter of growth after two rounds of contraction.
For 2022 as a whole, the US economy grew at a slower pace than the previous year, expanding 2.1 percent, the Commerce Department said.
"The weaker GDP print compared to the previous reading means the economy is slowing, but the above-forecast number will ease recession fears at the same time," said Fawad Razaqzada, market analyst at City Index and FOREX.com.
"They call this the 'goldilocks' scenario."
Investors were also closely watching the latest earnings from US giants American Airlines, Intel, Mastercard and Visa, as well as French luxury goods group LVMH.
Oil rose on hopes of growing Chinese demand after the country lifted Covid restrictions, while the dollar steadied.
"It will be a higher open for stocks that is rooted in a rash of earnings and economic data that were 'better than feared' and better than expected," said Patrick O'Hare, analyst at Briefing.com.
"That's a good combination," he added.
- Fed watch -
Investors are also focused on the next move of the US Federal Reserve, which has hiked rates since last year in a bid to tame galloping inflation.
The Fed will make its latest policy decision next week after slowing its pace of rate hikes in December following four straight 0.75-percentage-point increases.
Given that the Fed is meeting soon, the US growth figures were not expected to cause a "massive response in the market", Razaqzada said.
Speculation has been building in recent weeks that the bank could take its foot off the pedal as data points to inflation coming down quicker than expected and other indicators suggest last year's tightening was taking hold in the economy.
And while there remains some concern that the world's top economy could tip into recession, there is growing hope it can achieve a so-called soft landing.
Traders are also eyeing the Fed's preferred inflation gauge that is due on Friday.
In Asia on Thursday, Hong Kong led the way again to hit an 11-month high, helped by hopes that China's reopening will fuel a strong recovery this year.
But uneven earnings from tech giants largely kept sentiment in check.
Still, Asia continued to outperform after a strong start to the year.
- Key figures around 1440 GMT -
London - FTSE 100: UP 0.3 percent at 7,769.97 points
Frankfurt - DAX: UP 0.2 percent at 15,114.79
Paris - CAC 40: UP 0.9 percent at 7,107.48
EURO STOXX 50: UP 0.7 percent at 4,176.47
New York - Dow: UP 0.5 percent at 33,903.58
Hong Kong - Hang Seng Index: UP 2.4 percent at 22,566.78 (close)
Tokyo - Nikkei 225: DOWN 0.1 percent at 27,362.75 (close)
Shanghai - Composite: Closed for holiday
Euro/dollar: DOWN at $1.0898 from $1.0916 on Wednesday
Pound/dollar: DOWN at $1.2399 from $1.2403
Euro/pound: DOWN at 87.88 pence from 88.01 pence
Dollar/yen: UP at 130.08 yen from 129.59 yen
Brent North Sea crude: UP 2.2 percent at $87.98 per barrel
West Texas Intermediate: UP 2.4 percent $82.06 per barrel
T.Hancock--TNT
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