Berliner Boersenzeitung - Global stock markets edge higher as US inflation eases rate fears

A holiday-thinned week got off to a healthy start after last week's sell-off sparked by the US central bank signalling fewer interest rate cuts than had been expected for 2025.

Asian markets followed a strong lead from Wall Street, which rebounded on Friday on the inflation datat, with Tokyo and Hong Kong in the green. Shanghai was the sole decliner.

European markets struggled for direction, with London edging up and Paris and Frankfurt remaining flat.

Sharp losses last week were pared back after US inflation data for November came in lower than expected, providing some optimism that policymakers were winning the battle against prices and would have room to keep cutting rates.

Still, there remains some trepidation among investors as Donald Trump prepares to return to the White House, pledging to cut taxes, slash regulations and impose tariffs on imports, which some economists warn could reignite inflation.

"The initial response to the US election was positive as investors focused on the obvious tailwinds to profitability: lower corporate tax rates and less regulation," said Ronald Temple, chief market strategist at Lazard.

"However, I expect much more dispersion within the equity market when the reality of a much-less-friendly trade environment sets in."

Investors were also cheered by news that US lawmakers had reached a deal to avert a Christmastime government shutdown following marathon talks on Friday.

In the UK, the government was dealt a fresh blow after official data showed that the economy stagnated in the third quarter, revised down from inital estimates of 0.1 percent growth.

"The economy stood still between July and September, and that was before the budget cast another chill, and caused output to shrink in October," said Susannah Streeter, head of money and markets at Hargreaves.

Official data out of Spain on Monday showed that the Spanish economy grew 0.8 percent in the third quarter as domestic consumption and exports increased, comfortably outstripping the European Union average.

In company news, shares in crisis-hit German auto giant Volkswagen lost around two percent on the back of news Friday that it plans to axe 35,000 jobs by 2030 in a drastic cost-cutting plan.

Shares in Japanese auto giant Honda rose over three percent after it announced Monday an agreement to launch merger talks with struggling compatriot Nissan that could create the world's third largest automaker.

- Key figures around 1100 GMT -

London - FTSE 100: UP 0.1 percent at 8,090.68 points

Paris - CAC 40: FLAT at 7,274.85

Frankfurt - DAX: FLAT at 19,881.63

Tokyo - Nikkei 225: UP 1.2 percent at 39,161.34 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 19,883.13 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,351.26 (close)

New York - Dow: UP 1.2 percent at 42,840.26 (close)

Euro/dollar: DOWN at $1.0395 from $1.0431 on Friday

Pound/dollar: DOWN at $1.2543 from $1.2567

Dollar/yen: UP at 156.79 yen from 156.45 yen

Euro/pound: DOWN at 82.83 pence from 82.98 pence

West Texas Intermediate: DOWN 0.4 percent at $69.20 per barrel

Brent North Sea Crude: DOWN 0.4 percent at $72.66 per barrel

(A.Lehmann--BBZ)