European Stocks Higher; Potential U.K. Fiscal U

By Peter Nurse 

- European stock markets traded sharply higher Friday,Domestic foreign exchange agents =Business continuing the global rebound after the latest U.S. inflation data, while speculation mounted that the U.K. government will abandon its plans for massive unfunded tax cuts.

By 03:50 ET (07:50 GMT), the in Germany traded 1% higher, the in France rose 1%, and U.K.'s climbed 1%.

U.S. stocks surged to finish more than 2% higher Thursday, reversing sharp falls, equities in Asia have followed suit and European equities continued the positive tone despite another hot reading.

Investors are clearly pricing in another leap-up in short-term borrowing costs from the , but the gains in the global stock markets suggest fears that the inflation gains were going to be even more substantial.

Back in Europe, sentiment has been boosted by reports the U.K. government could abandon the 43 billion pounds ($48.6 billion) of unfunded tax cuts included in its so-called "mini-budget" a couple of weeks ago.

This followed the decision of U.K. Finance Minister Kwasi Kwarteng to cut short his trip to Washington and head back to London late Thursday, with the Bank of England set to end its emergency bond purchases later Friday.

In corporate news, TomTom (AS:) stock fell 6% after the Dutch navigation and digital mapping company released its third-quarter results, while (LON:) stock fell 2.6% after the investment manager saw its assets under management slip by $8 billion in its first quarter, as geopolitical and economic uncertainties led investors to shy away from riskier bets.

(SIX:) stock rose 0.5% on reports in the Spanish press that the Swiss bank is considering selling its stake in Madrid-based tech company Allfunds to raise cash.

Temenos (SIX:) stock fell 20% after the Swiss banking software company issued a profit warning, saying its customers have become more cautious amid macroeconomic uncertainty and rising costs.

Oil prices edged higher Friday, but still, look set to post a weekly loss after a spike in China’s COVID-19 cases and a bigger-than-expected build in U.S. crude inventories increased concerns over global demand.

COVID cases persist in China, the world's largest importer, including in Shanghai, the country's financial capital, threatening new lockdowns, which could severely crimp demand.

Additionally, official data from the U.S. Energy Information Administration showed that grew by 9.9 million barrels last week, much more than expected.

By 03:50 ET (07:50 GMT), traded 0.1% higher at $89.20 a barrel, while the contract traded flat at $94.58. Both contracts are down over 3% this week.

Additionally, fell 0.3% to $1,672.10/oz, while traded 0.1% lower at 0.9764.

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