World Stock Markets Rebound from Rout

Global stock markets rebounded Friday, one day after ferocious losses sparked by heightened economic concerns, notably over rising U.S. interest rates that have drawn attacks from President Donald Trump on his "crazy" central bank.

Wall Street snapped higher at the opening bell, with the Dow rising 1.6 percent, while the broader S&P 500 climbing 1.2 percent and the tech-heavy Nasdaq Composite jumping 2.6 percent.

Asia enjoyed healthy gains, with star performer Hong Kong surging 2.1 percent, Shanghai up 0.9 percent and Tokyo adding 0.5 percent, at the end of a traumatic week for investors worldwide.

Europe chased Asia higher Friday, with Frankfurt and Paris gaining 0.8 percent and London winning 0.7 percent as investors scooped up cheaper equities, which are widely regarded as a risky bet in times of economic turmoil.

The dollar recovered versus the euro and yen, while oil futures bounced back.

"U.S. stocks are recovering solidly in early action from the past two sessions of drops that have come from the festering concerns regarding the pace of the recent rally in Treasury yields that spilled over to the global markets," said analysts at Charles Schwab brokerage.

Still the rebound was only partial.

The Dow Jones ended down 2.1 percent on Thursday, making for a two-day 1,300-point stocks bloodbath, to close at the lowest levels in months.

"The brutal selloff that engulfed global stocks this week took a pause on Friday as risk sentiment slightly improved across financial markets," noted analyst Lukman Otunuga at trading firm FXTM.

"Although positive trade data from China and reports of U.S. President Donald Trump meeting Chinese President Xi Jinping at the G20 summit next month has rekindled risk appetite, stock markets are not out of the woods yet," he added.

- 'Absolute shocker of a week' -

Analysts cautioned that the U.S. earnings season -- which cranked into action Friday -- could indicate whether markets have bottomed out or not.

"Today's rebound appears to be offering a brief respite for investors at what has been an absolute shocker of a week," noted CMC Markets analyst Michael Hewson.

"While today's respite is welcome, it remains to be seen whether we have seen the bottom in the short term.

In the event U.S. banks Citigroup, JP Morgan and Wells Fargo reported higher third-quarter earnings on Friday, reflecting the benefits of higher interest rates for the financial sector, and their shares rose strongly in early trading.

Friday's fightback followed two days that have seen something approaching panic in global equity markets, as investors took fright in the face of rising U.S. interest rates and an intensifying trade war between Washington and Beijing.

The global sell-off was also due in part to Trump describing the policies of the U.S. Federal Reserve as "loco" and "crazy", sparking concerns over the independence of the world's top central bank.

But U.S. Treasury Secretary Steven Mnuchin on Friday downplayed the stocks plunge in Wall Street, saying it was "just a natural correction," in an interview on CNBC.

- 'Semblance of sanity' -

"There's a semblance of sanity returning to the markets, but we are no nearer a significant recovery," said Oanda analyst Stephen Innes.

Markets are "exhausted after the most significant sell-off in global equities since February," he added.

Most market watchers saw last week's surge in 10-year U.S. Treasury bond yields as the catalyst for the two-day rout on Wall Street.

Yields spiked at an unexpectedly fast rate, prompting worries about a sudden acceleration of inflation and more aggressive Federal Reserve interest rate hikes.

Separately on Friday, oil prices rebounded  from sharp losses a day earlier -- but gains were tempered after the International Energy Agency watchdog trimmed its global crude demand growth forecasts for 2018 and 2019.

- Key figures around 1330 GMT -

New York - Dow Jones: UP 1.6 percent at 25,455.75 points

London - FTSE 100: UP 0.7 percent at 7,052.77 

Paris - CAC 40: UP 0.8 percent at 5,146.24

Frankfurt - DAX 30: UP 0.8 percent at 11,627.80

EURO STOXX 50: UP 0.5 percent at 3,225.49

Tokyo - Nikkei 225: UP 0.5 percent at 22,694.66 (close)

Hong Kong - Hang Seng: UP 2.1 percent at 25,801.45 (close)

Shanghai - Composite: UP 0.9 percent at 2,606.91 (close)

Euro/dollar: DOWN at $1.1556 from $1.1593 at 2100 GMT on Thursday

Pound/dollar: DOWN at $1.3194 from $1.3230

Dollar/yen: UP at 112.25 from 112.16 yen

Oil - Brent Crude: UP 65 cents at $80.91 per barrel 

Oil - West Texas Intermediate: UP 73 cents at $71.70