Australia

Australian shares are set to edge higher after Wall Street jumped in trade on Thursday. The turn higher came as a relief after another punishing span in the markets. The Nasdaq Composite, like the S&P 500, closed lower on Wednesday for a sixth consecutive trading day. Still, such moves -- sharp gains as well as steep drops -- can be a sign of trouble. Markets were rocked by similar gyrations as they tumbled early in the pandemic.

ASX futures were up 115 points or 1.73% at 6750 as of 7:00am on Friday, pointing to a jump at the open.

US stocks turned sharply higher Thursday, a head-spinning reversal after major indexes spent much of the morning deep in negative territory.

The morning's declines followed what had been a dismal stretch for stocks, but traders appeared to decide that the selling had gone too far. Stocks pared their losses throughout the morning, then turned green shortly after 11 a.m. The S&P 500 recently was up 2.6% while the Dow industrials were up about 2.8%, or about 827 points. The Nasdaq Composite advanced 2.2%.

"What the market is experiencing is the influences of a lot of short-term traders," said Tom Galvin, chief investment officer at wealth management firm City National Rochdale. While some traders dumped stocks after the inflation data, "once they were done selling, I think markets started to stabilize."

In commodity markets, Brent crude oil jumped 2.4% to $US94.7 a barrel, gold edged down 0.5% to US$1,664.74.

In local bond markets, the yield on Australian 2 Year government bonds dropped to 3.28% while the 10 Year rose to 4%. Overseas, the yield on 2 Year US Treasury notes rose to 4.46% and the yield on the 10 Year US Treasury notes was up to 3.96%.

The Australian dollar hit 63 US cents up from the previous close of 62.76. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 104.27.

Asia

Chinese shares ended mixed, as a rise in Covid-19 cases in the country and related lockdown measures continued to weigh on sentiment. Coal miners and property developers declined, while pharma companies advanced. China Coal Energy slid 7.6%, Yankuang Energy lost 4.9% and Poly Developments gave up 2.5%. WuXi AppTec rose 5.4% after projecting net profit for the first nine months of the year to more than double from a year earlier. Peer Jiangsu Hengrui Medicine also added 3.9%. The Shanghai Composite Index dropped 0.3% to 3016.36, but the Shenzhen Composite Index climbed 0.2% and the ChiNext Price Index was 0.3% higher.

Hong Kong's Hang Seng Index fell 1.9% to 16389.11, extending a losing streak to the sixth session and hitting a fresh 11-year low, as casino stocks and property developers weakened. Covid-19 outbreaks in China raise the prospect of prolonged mobility restrictions. Sands China lost 7.5% and Galaxy Entertainment was 1.9% lower. CIFI Holdings skidded 10%, though it said media reports about its offshore debt may not be accurate and that talks with relevant creditor groups are "constructive." Its peers, Country Garden Holdings and Longfor Group, retreated 9.8% and 6.4%, respectively. The pharmaceutical sector was a bright spot. WuXi AppTec added 3.0% after strong earnings projections, while BeiGene jumped 14% after it said its drug Brukinsa performed better than a competitor at a trial.

The Nikkei Stock Average closed 0.6% lower at 26237.42, amid concerns about the global economic outlook and geopolitical tensions. Aviation stocks were lower, with ANA falling 2.9% and JAL declining 2.8%. Toshiba rose 7.4% following a report that a group led by Japan Industrial Partners was planning to buy the company for Y2.8 trillion. USD/JPY was last at 146.81 compared with 146.89 late Wednesday in New York. The yield on the 10-year JGB was down half a basis point at 0.245%.

Europe

European stocks gained amid higher-than-expected core US inflation data and speculation about a potential UK government U-turn on controversial tax-cutting plans. The pan-European Stoxx Europe 600 gained 0.9%, and the German DAX and French CAC 40 climbed more than 1%.

"It looks like the market's pricing in a rising probability of a major U-turn or even potentially several, improving the UK's fiscal outlook while simultaneously leaving the new prime minister and her chancellor looking like they're unable to control events," IG analyst Chris Beauchamp wrote.

In London, the FTSE 100 on Thursday closed up 0.4% at 6,850 points, bouncing back from losses earlier in the week. The index's top risers were Ocado Group, International Consolidated Airlines Group and NatWest Group, closing up 11%, 8.0% and 7.7%, respectively.

North America

US stocks turned sharply higher Thursday, a head-spinning reversal after major indexes spent much of the morning deep in negative territory. Stocks tumbled in early trading after new data showed that inflation remains persistently high, strengthening expectations for continued large interest-rate increases from the Federal Reserve.

Traders appeared to decide that the selling had gone too far. Stocks pared their losses throughout the morning, then turned green shortly after 11 a.m. The S&P 500 recently was up 2.6% while the Dow industrials were up about 2.8%, or about 827 points. The Nasdaq Composite advanced 2.2%.

"What the market is experiencing is the influences of a lot of short-term traders," said Tom Galvin, chief investment officer at wealth management firm City National Rochdale. While some traders dumped stocks after the inflation data, "once they were done selling, I think markets started to stabilize."

The turn higher came as a relief after another punishing span in the markets. Still, such moves -- sharp gains as well as steep drops -- can be a sign of trouble. Markets were rocked by similar gyrations as they tumbled early in the pandemic.

Investors have been fixated on any signals about the path of inflation and the trajectory of the Federal Reserve's campaign to tame the price increases by raising interest rates. Rising rates put pressure on the valuations that investors are willing to pay for stocks, while also raising concerns about companies' future earnings.

Earlier Thursday, new data from the Labor Department showed that a reading of US consumer inflation excluding volatile energy and food prices accelerated to a new four-decade high. The so-called core measure of the consumer-price index gained 6.6% in September from a year earlier, the biggest increase since August 1982.

The overall consumer-price index, meanwhile, increased 8.2% in September from the same month a year ago, down from 8.3% in August and 9.1% in June. That move lower could be welcome news for investors looking to justify buying back into a stock market that is trading much more cheaply than in the recent past.

"The fact that you're seeing some peaking out in inflation to where maybe we just don't have to fight the Fed so much, people will feel comfortable buying in at these levels," said Dan Genter, chief executive and chief investment officer at Genter Capital Management.

Investors have debated whether signs of stress creeping into some markets might cause the Fed to slow its pace of interest-rate increases. Volatility in U.K. government-bond markets, following government plans for large, debt-funded tax cuts, has sparked margin calls for pension funds and rippled into US junk-debt markets.

Mortgage rates hit a 20-year high on Thursday, a development that is likely to add to the pressure on the cooling housing market, potentially accelerating the shakeout of this cyclical industry.

Federal Reserve officials expressed concern at their meeting last month over the persistence of high inflation. They revised higher their expectations for rate increases, though some signaled caution about overdoing them amid risks of economic and financial volatility. The International Monetary Fund has warned that global central banks' moves to quickly raise interest rates have fueled increased risks to the financial system.

"Market volatility and financial stability is something we're following closely," said Carsten Brzeski, ING Groep's global head of macro research, adding that the fast rise in interest rates "is clearly a potential risk."

Additional data from the Labor Department showed that 228,000 Americans applied for unemployment benefits in the week ended Oct. 8, up from 219,000 the week prior.