Volkswacht Bodensee - Stock markets seek to hold onto gains

Equity markets have enjoyed one of their best weeks since US President Donald Trump's "Liberation Day" tariff bazooka last month caused indices to slump.

"The chief driver of global markets this week has been improving US trade relations, especially with China," said Kathleen Brooks, research director at XTB.

"However, as we end the week, this is fading," she added.

The United States and China on Monday announced they would slash their tit-for-tat tariffs for 90 days to allow for talks, but considerable levies remain in place.

Investors are now awaiting signals from the US president on progress in trade talks, as countries seek deals to avoid his steeper levies, as well as more information about their economic impact.

Analysts warn that initial optimism of the US-China trade truce may have been overdone given that tariffs remain in place and pose a threat to economic growth.

A "baseline" 10-percent tariff on US imports of goods from nearly every country remains in place.

"Even if more trade deals are announced, it is still the case that tariffs on goods entering the US will be much higher than anyone dared to contemplate," said IG chief market analyst Chris Beauchamp.

Analysts and investors worry that higher prices will lead to economic growth slowing.

April US inflation data released this week came in lower than expected, although analysts said the impact of tariffs is more likely to be visible in May or June data.

Top US retailer Walmart warned Thursday that it will begin raising prices soon due to tariffs.

Analysts will be scrutinising US consumer sentiment data due out later Friday.

"This will be a closely watched report to see if it reveals improved consumer attitudes about personal finances and inflation following the 90-day pause for reciprocal tariff rates and sharp recovery in the stock market," said Patrick O'Hare at Briefing.com.

Oil prices rebounded after tumbling Thursday on the possibility a breakthrough in Iran nuclear talks, fuelled by Trump saying progress had been made on a deal.

The dollar edged down against the euro and the yen on raised expectations that the Federal Reserve would still cut interest rates this year following mixed inflation data.

Luxury stocks were bolstered after Cartier-owner Richemont posted higher net profit and sales, driven by resilience in its jewellery business, despite the sector struggling with weak demand from China.

Shares in Danish drugmaker Novo Nordisk, known for its blockbuster diabetes and weight-loss treatments Ozempic and Wegovy, dropped 2.5 percent after it announced the departure of its chief executive.

Novo Nordisk's share price fallen by more than half since June 2024 as it faces more competition.

E-commerce titan Alibaba shed over six percent in Hong Kong after reporting a disappointing rise in first-quarter revenue amid sluggish consumer spending in China.

- Key figures at around 1330 GMT -

New York - Dow: DOWN less than 0.1 percent at 42,298.25 points

New York - S&P 500: UP 0.1 percent at 5,923.80

New York - Nasdaq Composite: UP 0.2 percent at 19,151.26

London - FTSE 100: UP 0.2 percent at 8,654.75

Paris - CAC 40: FLAT at 7,856.37

Frankfurt - DAX: FLAT at 23,686.75

Tokyo - Nikkei 225: FLAT at 37,753.72 (close)

Hong Kong - Hang Seng Index: DOWN 0.5 percent at 23,345.05 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,367.46 (close)

Euro/dollar: UP at $1.1193 from $1.1185 on Thursday

Pound/dollar: DOWN at $1.3286 from $1.3304

Dollar/yen: DOWN at 145.56 yen from 145.65 yen

Euro/pound: UP at 84.29 from 84.07 pence

Brent North Sea Crude: UP 0.7 percent at $64.98 per barrel

West Texas Intermediate: UP 0.7 percent at $61.55 per barrel

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P.Vogel--VB