Volkswacht Bodensee - Global stocks mixed ahead of looming US government shutdown

On Wall Street, stocks reversed some earlier gains to close out a gloomy month of trading while the US government headed towards its first shutdown since 2019 over the weekend.

This came as hardline Republicans tanked a plan proposed by their own party to keep funds flowing.

The Dow Jones Industrial Average and broad-based S&P 500 both ended the day in the red, while the tech-rich Nasdaq Composite Index etched out a small gain.

"I think the idea of a potential government shutdown is not a major factor driving stock prices but it certainly doesn't help sentiment at all," Steve Sosnick from Interactive Brokers told AFP.

- Easing inflation -

Fears that rising oil prices would keep overall inflation high have weighed heavily on investor sentiment in September, which saw major indexes fall to lows not seen in months.

But European markets got off to a strong start after data showed that eurozone inflation slowed in September to 4.3 percent.

This was the lowest level since October 2021 -- before the invasion of Ukraine by Russia that sparked price surges worldwide.

Later Friday, data involving the US central bank's preferred measure of inflation -- the personal consumption expenditures (PCE) price index -- showed core inflation dropping to 3.9 percent in August.

The measure, which strips out more volatile food and energy prices, spurred hopes that inflation was edging down toward the Federal Reserve's target of two percent.

- Oil optimism -

Easing oil prices after weeks of steady gains over supply fears added to the optimistic outlook.

"A lower oil price, US yields and US dollar also help sentiment, despite the greenback remaining on track for its eleventh consecutive week of gains," Axel Rudolph, senior analyst at the online trading platform IG, told AFP.

But analysts said caution will remain the watchword as bond yields remain high and blue chip companies begin posting third-quarter earnings in the coming weeks, when CEOs often indicate if annual profit targets will be met or not.

"Investors have a long list of things to worry about, and core PCE still may not be low enough for the Fed to end its quest to crush inflation," said Callie Cox, an investment analyst at the trading platform eToro.

- Tech strength -

In Asia, Hong Kong's Hang Seng Index jumped more than two percent thanks to a surge in tech firms including Alibaba and JD.com.

Sydney, Singapore, Wellington, Mumbai and Jakarta also ended higher, while Tokyo, Manila and Bangkok dipped.

Mainland Chinese markets were closed for the start of an eight-day national holiday.

London's benchmark index also won support Friday after official data showed the British economy had performed much better than expected between the eve of the Covid pandemic and the second quarter of this year.

- Key figures at 2030 GMT -

New York - Dow: DOWN 0.5 percent at 33,507.50 points (close)

New York - S&P 500: DOWN 0.3 percent at 4,288.05 (close)

New York - Nasdaq: UP 0.1 percent at 13,219.32 (close)

London - FTSE 100: UP 0.1 percent at 7,608.08 points (close)

Frankfurt - DAX: UP 0.4 percent at 15,386.58 (close)

Paris - CAC 40: UP 0.3 percent at 7,135.06 (close)

EURO STOXX 50: UP 0.3 percent at 4,174.66 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 31,857.62 (close)

Hong Kong - Hang Seng Index: UP 2.5 percent at 17,809.66 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.0576 from $1.0570 on Thursday

Pound/dollar: UP at $1.2205 from $1.2203

Euro/pound: UP at 86.64 pence from 86.59 pence

Dollar/yen: UP at 149.40 yen from 149.28 yen

Brent North Sea crude: DOWN 0.1 percent at $95.31 per barrel

West Texas Intermediate: DOWN 1.0 percent at $90.79 per barrel

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