Berliner Boersenzeitung - European stocks rally, but Wall Street and Hong Kong fizzle

By contrast, Hong Kong stocks slumped after rallying for much of the week, as traders awaited guidance on more Chinese stimulus.

And Wall Street's main indices were steady at the opening bell following more record finishes for the Dow and S&P 500 on Thursday and despite the US Federal Reserve's preferred gauge of inflation coming in as expected.

Oil prices fell as traders banked profits from a strong week for crude.

"European indices are on the rise, as stronger commodity and banking stocks help the FTSE 100, and French luxury retailers basked in the glow of a 10-percent (plus) gain for LVMH," noted Joshua Mahony, chief market analyst at Scope Markets.

The world's largest luxury goods group soared 12.5 percent in Paris afternoon deals.

Frankfurt rose only slightly Friday after a survey showed consumer sentiment had soured at the start of the year in Germany, Europe's biggest economy.

In the United States, the Fed's preferred gauge of inflation -- the personal consumption expenditures index -- held steady last month at 2.6 percent on a headline bases, in line with expectations.

The core PCE Price Index -- which excludes volatile energy and food prices -- fell to 2.9 percent from 3.2 percent in November.

Investors closely track inflation and other data for clues on whether it could prompt the Fed to cut rates soon this year.

Briefing.com analyst Patrick O'Hare noted that the inflation figure was the lowest since March 2021.

"The key takeaway from the report should be more Goldilocks than anything else: consumer spending is strong and core inflation, which the Fed is targeting, is moving toward the two percent target," he said.

O'Hare put the lacklustre reaction in the market down to the fact that the figures were expected.

"If anything, the market may have wanted 'more', so when the inflation gauges were only in-line with expectations, there was some selling on the news following the spirited move in the market this week," he said.

Figures Thursday showed the US economy expanded a much better-than-expected 3.3 percent in the last three months of the year thanks to a strong jobs market and consumer spending.

"There are no recession concerns here, and to make matters even better, we don't see any accompanying blowout growth in prices that are used in the GDP calculation," said Charles Hepworth at GAM Investments.

"Stronger growth without inflation is what everyone wants."

Michael Hewson of CMC Markets said the chances of a cut to US interest rates in March were slim, having been put at around 80 percent at the start of January.

"There is a danger that in cutting rates in March they drive market expectations of further cuts into overdrive, something they have been keen to push back on with recent commentary," he noted.

- Key figures around 1430 GMT -

New York - Dow: UP less than 0.1 percent at 38,080.07 points

New York - S&P 500: FLAT at 4,893.97

New York - Nasdaq Composite: DOWN 0.2 percent at 15,473.19

Paris - CAC 40: UP 2.3 percent at 7,633.20

London - FTSE 100: UP 1.4 percent at 7,644.67

Frankfurt - DAX: UP 0.2 percent at 16,941.47

EURO STOXX 50: UP 1.0 percent at 4,629.54

Tokyo - Nikkei 225: DOWN 1.3 percent at 35,751.07 (close)

Hong Kong - Hang Seng Index: DOWN 1.6 percent at 15,952.23 (close)

Shanghai - Composite: UP 0.1 percent at 2,910.22 (close)

Euro/dollar: DOWN at $1.0865 from $1.0885 on Thursday

Dollar/yen: UP at 147.84 yen from 147.51 yen

Pound/dollar: UP at $1.2736 from $1.2726

Euro/pound: DOWN at 85.30 pence from 85.53 pence

West Texas Intermediate: DOWN 0.8 percent at $76.78 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $82.03 per barrel

burs-rl/lth

(H.Schneide--BBZ)