Volkswacht Bodensee - Wall Street rebounds, European stocks slump at end of volatile week

By contrast, Wall Street was in positive territory, and oil prices were steady.

The week has been dominated by investor concern that any possible interest rates by the US Federal Reserve -- as it seeks to rein in high inflation -- could choke off economic recovery following pandemic-induced lockdowns.

The European Central Bank, for its part, appears to be sitting tight for the time being, causing the euro to fall to a 19-month low against the dollar on Friday.

Rising tensions between Russia and the West over the Ukraine crisis have wiped around $7 trillion off stock market valuations across the globe so far this month.

"Downbeat mood rounds up a volatile week for markets," said Victoria Scholar, head of investment at Interactive Investor.

Wall Street was nevertheless in the black, with the tech-heavy NASDAQ rising by 1.4 percent after Apple unveiled record revenues.

Nevertheless, "inflation and tightening concerns exacerbated by surging oil prices and a hawkish Federal Reserve" continued to weigh on sentiment, said ThinkMarkets analyst, Fawad Razaqzada.

In Europe, Frankfurt and Paris ended the day in the red, even though France posted its strongest economist in more than 50 years, while German growth data disappointed.

The German economy shrank by 0.7 percent in the fourth quarter, but expanded by 2.8 percent over the year as a whole, the data showed, while in neighbouring France, economic growth reached seven percent.

In the US, inflation picked up to 4.9 percent in December from 4.7 percent in November.

"The consumer inflation rate is at a near 40-year high, wage pressures are building, supply chains are still tangled, oil prices are at a seven-year high, and more and more companies are talking about ongoing cost pressures," said Patrick O'Hare at Briefing.com.

While stock markets have rallied for the best part of two years, analysts said a hefty pullback can be expected, as investors take profit and central banks roll back massive pandemic-era stimulus.

Crude oil prices remained well-supported after a strong trading week, aided by the Ukraine-Russia crisis, with Brent rising above $91 per barrel.

"Russia's supply of natural gas to Western Europe could further spark volatility across financial markets, and as we turn the corner on the pandemic we now see a possible conflict as one of the biggest threats to markets in 2022," warned Federated Hermes analyst, Lewis Grant.

- Key figures around 1650 GMT -

New York - Dow: UP 0.2 percent at 34,227.14 points

London - FTSE 100: DOWN 1.1 percent at 7,466.07 (close)

Frankfurt - DAX: DOWN 0.5 percent at 15,356.16 (close)

Paris - CAC 40: DOWN 0.8 percent at 6,965.88 (close)

EURO STOXX 50: DOWN 1.1 percent at 4,137.74

Tokyo - Nikkei 225: UP 2.1 percent at 26,717.34 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 23,550.08 (close)

Shanghai - Composite: DOWN 1.0 percent at 3,361.44 (close)

Euro/dollar: UP at $1.1165 from $1.1147

Pound/dollar: UP at $1.3413 from $1.3381

Euro/pound: DOWN at 83.24 pence from 83.27 pence

Dollar/yen: DOWN at 115.19 yen from 115.36 yen

Brent North Sea crude: UP 0.6 percent at $90.61 per barrel

West Texas Intermediate: UP 1.6 percent at $88.02 per barrel

burs-rl/cdw/spm

P.Anderson--BTB