US stocks bounced back at the opening bell in what has been a historically bad week for markets around the world.
European stock markets have rebounded at the end of a volatile week even as investors continue to grapple with concerns over inflation, amid fears of looming stagflation and possible recession.
The London benchmark was led by gains for oil and banking stocks, recouping by midday the steep losses suffered on Thursday.
Oil majors BP (BP.L) and Shell (SHEL.L) climbed 3.9% and 2.9%, respectively, tracking a recovery in oil prices as worries over China's COVID lockdowns slowing global growth offset concerns about dwindling fuel supplies from Russia, the world's second-largest oil exporter.
"After the recession rout there was a calmer feel to market proceedings on Friday," AJ Bell investment director Russ Mould said. "A late recovery on Wall Street on Thursday may have helped investors' mood but the up and down nature of trading is a reminder of just how febrile things are right now."
Sage Group (SGE.L) was among the biggest risers, up as much as 3.4%, after the software company posted a strong performance for the first half of the year.
Despite the strong open “’investors are continuing to wrestling with worries over inflation,” according to Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“As the oil price climbs back up again and supply concerns resurface amid ongoing geo-political tensions. As the era of cheap money has hurtled to an end, lowering liquidity in the markets, trading in the sessions ahead is set to stay volatile.
“Prospects loom of a European ban on Russian crude while work on a compromise to cater for Hungary’s demand for an exemption continues.”
“Tensions have been pushed up after Russia slapped sanctions on European subsidiaries of state owned Gazprom. For now though a lid is being kept on the oil price by China’s zero-COVID policy and its city wide whack-a-mole approach of using mass lockdowns to quash infection spikes.”
There were positive signs on Friday in the main Asian indices as Hong Kong's Hang Seng (^HSI) gained 2.4%. The Nikkei 225 (^N225) in Tokyo advanced 2.6% while the Shanghai Composite (000001.SS) climbed 0.8%.
Meanwhile, crude oil prices were still above the $100 a barrel mark. Brent crude (BZ=F) was up 3.1%, trading at $110 a barrel on Friday.
“Crude oil prices, which spent most of yesterday lower, before rallying into the close, has spent the week being pressured by worries over slow growth and stagflation on the one hand, while on the other hand is being underpinned over attempts by Russia to use oil and gas as weapons," Michael Hewson, chief market analyst at CMC Markets, said
"The rebound came about when Gazprom announced it would cut gas shipments to Europe through the Yamal pipeline, after the Kremlin imposed sanctions on European gas companies.”