Berliner Boersenzeitung - Stock markets get boost from bank earnings, inflation data

Wall Street's three main indexes jumped after US financial titans Goldman Sachs, JPMorgan Chase, BlackRock and others posted stellar quarterly results.

Shares in Goldman Sachs, Citigroup and BlackRock surged almost five percent, though JPMorgan saw a more modest gain of 0.5 percent.

European stock markets were also firmly in the green in afternoon deals while Asia finished on a mixed note.

US inflation rose for a third straight month in December, reaching 2.9 percent, in line with expectations from economists.

But "core" inflation, which excludes volatile food and energy costs, came in at a lower-than-expected 3.2 percent, a slight decline from the month earlier.

"The key takeaway from the report for a market worried about inflation heating up again is that these results were better than feared," said Briefing.com analyst Patrick O'Hare.

Kathleen Brooks, research director at trading platform XTB, noted that the US Federal Reserve closely looks at core inflation to make decisions on interest rates.

"Digging deeper into this report, although headline inflation was higher, this was down to food prices and a sharp rise in monthly gas prices," Brooks said.

"The Fed could choose to look through price increases for volatile commodities that they cannot control. Instead, the Fed may focus on core inflation," she added.

Analysts have pared back their expectations on the number of Fed rate cuts for this year and believe policymakers will hold borrowing costs steady at the next decision-making meeting later this month as inflation remains above its two-percent target.

In Britain, official figures showed that inflation unexpectedly fell to 2.5 percent in December, easing some pressure on the Labour government as it struggles with growing the economy.

The pound rose versus the dollar, with analysts forecasting that the Bank of England would likely cut its key interest rate next month as the rate of price increases cools.

Separate official data showed Europe's biggest economy Germany contracted for a second straight year in 2024, with little hope of a strong recovery ahead of national elections next month.

- Nintendo jump -

In Asia, Tokyo's stock market ended down, though games giant Nintendo piled on more than two percent and briefly hit a record high as traders anticipate it will soon release its much-anticipated Switch 2 console.

The Nikkei 225's drop also came as the yen strengthened, with traders weighing the chances of a rate hike by the Bank of Japan this month.

Also in focus this week is the release of Chinese 2024 growth data, with expectations that it could come in below the previous year and be among the slowest in more than three decades.

Leaders have unveiled a string of measures to reignite the economy, with a particular emphasis on consumers and the troubled property sector, though there are fears the return of President-elect Donald Trump could see another painful China-US trade war.

Trump has warned he will impose tariffs of as much as 60 percent on imports from China, and observers say Beijing has likely kept its powder dry with regards stimulus as it prepares for the next four years.

- Key figures around 1445 GMT -

New York - Dow: UP 1.6 percent at 43,198.12 points

New York - S&P: UP 1.6 percent at 5,937.28

New York - Nasdaq Composite: UP 2.0 19,418.76

London - FTSE 100: UP 0.9 percent at 8,277.79

Paris - CAC 40: UP 0.9 percent at 7,491.39

Frankfurt - DAX: UP 1.5 percent at 20,575.66

Tokyo - Nikkei 225: DOWN 0.1 percent at 38,444.58 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 19,286.07 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,227.12 (close)

Euro/dollar: UP at $1.0335 from $1.0310 on Tuesday

Pound/dollar: UP at $1.2283 from $1.2211

Dollar/yen: DOWN at 156.24 yen from 157.98 yen

Euro/pound: DOWN at 84.13 pence from 84.40 pence

Brent North Sea Crude: UP 1.0 at $80.75 per barrel

West Texas Intermediate: UP 1.4 percent at $77.41 per barrel

(L.Kaufmann--BBZ)