European stock markets started Friday in positive territory as traders digested the aftermath of chancellor Jeremy Hunt’s autumn budget.
In London, the FTSE 100 (^FTSE) rose 0.3% after opening, with a boost from the energy and mining sectors. The CAC (^FCHI) rose 0.5% in Paris and the Frankfurt DAX (^GDAXI) was 0.4% lower.
Earlier on Friday morning, the finance minister said that Britain faces a challenging time over the next two years, but that his budget would help tackle inflation and put the economy on a stronger footing.
“Over the next two years it is going to be challenging, but I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop,” he told Sky News.
It came as UK retail sales rebounded in October, according to the Office for National Statistics (ONS).
Excluding fuel sales, the volume of goods sold in shops and online rose 0.3% after a 1.5% fall the month before — impacted by stores closing for the funeral of Queen Elizabeth II.
But this was still lower than economists had expected after forecasting a gain of 0.6%.
Across the pond, S&P 500 futures (ES=F) were down 0.2%, Dow futures (YM=F) shed 0.2%, and Nasdaq futures (NQ=F) were also 0.2% lower as trade began in Europe.
Treasury yields were little changed after the previous day’s jump when St. Louis Fed president James Bullard said policymakers should increase interest rates from at least 5% to 5.25% to curb inflation. He also warned of further financial stress ahead.
US markets finished lower for the second day in a row on the back of these comments.
Read more: From income tax to pensions: What Jeremy Hunt’s Autumn statement means for you
The dollar steadied while oil (BZ=F) stood poised for a weekly loss as concerns over a worsening demand outlook filtered through the crude market.
Demand concerns also weighed on prices due to a continued rise in COVID cases across China.
Asian stock markets closed in the red overnight after Chinese technology shares came off their intraday highs, and as investors awaited results of quarterly index reshuffling for Hong Kong’s benchmark gauge.
In Tokyo, the Nikkei (^N225) fell 0.1% while the Hang Seng (^HSI) dipped 0.3% in Hong Kong, and the Shanghai Composite (000001.SS) ended 0.6% lower.
Watch: How does inflation affect interest rates?
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