Volkswacht Bodensee - Stocks rise as US rate hopes soothe nerves

"In a week that is stunted by the Thanksgiving celebrations, there is a degree of hope that perhaps the worst is behind us, and we can get into a more festive mood," noted Joshua Mahony, chief market analyst at traders Scope Markets.

Frankfurt led the way in Europe, gaining 0.5 percent nearing midday, while London edged higher awaiting the UK government's annual budget on Wednesday.

Hong Kong closed up 2.0 percent and Tokyo was shut for a Japanese public holiday.

The scramble to snap up all things artificial intelligence has helped propel equities skywards this year, pushing several companies to records -- with chip titan Nvidia last month becoming the first to top $5 trillion.

But investors have grown increasingly fearful that the vast sums pumped into the sector may have been overdone and could take some time to see profits realised, leading to warnings of a possible market correction.

That has been compounded in recent weeks by falling expectations the Federal Reserve will cut rates for a third successive time next month as stubbornly high inflation overshadows weakness in the labour market.

However, risk appetite was given a much-needed shot in the arm Friday when New York Fed boss John Williams said he still sees "room for a further adjustment" at the bank's December 9-10 policy meeting.

His comments came a day after figures showed that while more jobs were created in September, the unemployment rate crept to its highest level since 2021.

A pick-up in betting on a December cut saw the odds shoot up to about 70 percent, from 35 percent earlier.

Focus is now on the release this week of the US producer price index (PPI), which will be one of the last major data points before officials gather, with other key reports postponed or missed because of the government shutdown.

"The reading carries heightened importance following the postponement of October's personal consumption expenditures report, originally scheduled for 26 November, which removes a key datapoint from policymakers' assessment framework," wrote IG market analyst Fabien Yip.

"A substantially stronger-than-expected PPI outcome could reinforce concerns that inflationary pressures remain entrenched, potentially constraining the Fed's capacity to reduce rates in December despite recent labour market softening."

- Key figures at around 1045 GMT -

London - FTSE 100: UP 0.1 percent at 9,550.78 points

Paris - CAC 40: DOWN 0.1 percent at 7,974.56

Frankfurt - DAX: UP 0.5 percent at 23,199.19

Hong Kong - Hang Seng Index: UP 2.0 percent at 25,716.50 (close)

Shanghai - Composite: UP 0.1 percent at 3,836.77 (close)

Tokyo - Nikkei 225: Closed for a holiday

New York - Dow: UP 1.1 percent at 46,245.41 (close)

Euro/dollar: UP at $1.1542 from $1.1519 on Friday

Pound/dollar: DOWN at $1.3095 from $1.3107

Dollar/yen: UP at 156.72 yen from 156.39 yen

Euro/pound: UP at 87.95 pence from 87.88 pence

Brent North Sea Crude: DOWN 0.6 percent at $61.57 per barrel

West Texas Intermediate: DOWN 0.7 percent at $57.67 per barrel

H.Kuenzler--VB