European stocks rise ahead of VW CEO announcement
TOKYO - European shares rebounded Friday ahead of the announcement of a new CEO at scandal-tainted Volkswagen while also digesting the U.S. Federal Reserve chief's comment that an interest rate hike is likely this year. Asian stocks were mixed.
France's CAC 40 added 2.9 percent in early trading to 4,473.43 and Germany's DAX rose 2.7 percent to 9,680.26. Britain's FTSE 100 added 2.3 percent to 6,096.30.
U.S. shares were set to rise. S&P 500 futures gained 1.2 percent and Dow futures were up 1.3 percent.
Jitters over the emissions-rigging scandal at Volkswagen AG appeared to ease amid anticipation that a new CEO might come out of a supervisory board meeting Friday. Martin Winterkorn quit as CEO earlier this week. Volkswagen shares were trading 1.4 percent higher, although it did not recoup all their losses from a nosedive after the scandal surfaced.
Federal Reserve Chair Janet Yellen said in a speech after markets closed Thursday she expects the Fed to begin raising interest rates by the end of the year. She also suggested global economic weakness won't be significant enough to alter the central bank's plan to raise its key short-term rate from zero by December. Record low interest rates since the 2008 global financial crisis have been a boon for stock markets but as the U.S. economy recovers, abnormally loose financial conditions have to be tightened to prevent inflation from rising to economically damaging levels in the future.
"It's still too early to say that the lows in share markets have been seen. The volatility and consolidation we have seen in share markets since late August could be a sign of base building but it could also just be a pause before another dip to new lows," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "This is particularly so given that worries about global growth and the Fed remain."
Japan's Nikkei 225 recouped earlier losses to finish up 1.8 percent at 17,880.51. South Korea's Kospi fell 0.2 percent to 1,942.85. Hong Kong's Hang Seng inched up 0.4 percent to 21,186.32. China's Shanghai Composite dropped 1.6 percent to 3,092.35 and Australia's S&P/ASX 200 shed 0.6 percent to 5,042.10. Stock benchmarks were higher in Taiwan, but lower in Singapore and Indonesia.
Benchmark U.S. crude was up 37 cents at $45.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 43 cents to $44.91 in New York on Thursday. Brent crude, a benchmark for many international oils, was down 4 cents at $48.82 in London.
The euro fell to $1.1136 from $1.1179 on Thursday. The dollar rose to 121.01 yen from 120.19 yen.