A strong overnight rebound in US stocks helped lend support for European and Asian markets on Thursday, despite an initial sell off on Wednesday following US inflation data.
Spread betting companies expected European markets to open higher, with the FTSE 100 in London seen putting on around 20 points in opening exchanges.
Europe and Asian gains
European stocks opened higher, with the EuroStoxx 50 index of pan-European shares up 0.67% to 3,401. London's FTSE 100 added 0.43% at the open to 7,243, while Frankfurt's Xetra Dax climbed 0.64% to 12,416 and the CAC 40 in Paris rose 1.07% to 5,221.
Asian stock indices were all higher: Tokyo's Nikkei 225 rose 1.4% to 21,450.5, Sydney's S&P/ASX 200 added 1.16% to 5,909, and Hong Kong's Hang Seng climbed 1.75% to 31,050.
Overnight on Wall Street, the Dow Jones Industrial Average climbed 1.03%, the S&P 500 added 1.34% and the Nasdaq 1.86%.
Wednesday's robust performance from US stocks, despite the stronger than expected inflation print, suggested many investors were now more confident the economy and equity markets can withstand further monetary policy normalisation.
Oliver Jones at Capital Economics said: "There is not a mechanical link between increases in interest rate expectations and falls in the stock market.
"After all, the rally in the US stock market in the past couple of years coincided with 125 basis points of rate hikes from the Federal Reserve and a marked increase in Treasury yields."
However, Capital Economics remained subdued on the prospect for US stocks this year, predicting an economic slowdown, with growth crimped by rising rates and fading fiscal stimulus.
"With expectations for earnings likely to suffer, and valuations looking even less attractive as bond yields edge higher, the stock market would probably come under yet more pressure," Jones added.
Producer price inflation data
Nevertheless, very early indications on US futures markets suggested opening gains on Wall Street this afternoon.
Investors will be watching for signs of underlying inflation in the US on Thursday, with producer price data published at 13.30 London time giving some idea of the price pressures on US manufacturers.
Expect some initial turbulence in stock markets this afternoon if the data comes in above forecasts.