TOKYO - Global stock markets wavered Friday on renewed expectations for a Fed rate hike this year but are ending October with strong gains after snapping back from a volatile third quarter. The New Zealand dollar jumped on prospects of increased dairy exports after China abolished its one-child policy.
France's CAC 40 rose 0.2 percent to 4,897.76 in early trading and Germany's DAX added 0.4 percent to 10,833.99. Britain's FTSE 100 inched up 0.1 percent to 6,401.08. The DAX is the best performing major European stock index in October, with a gain of more than 14 percent.
U.S. shares were set to rise: Both S&P 500 and Dow futures were up 0.1 percent. The S&P 500 has gained 10.9 percent in October so far.
The New Zealand dollar surged in the wake of China's announcement it would allow all couples to have two children, abolishing its unpopular one-child policy. New Zealand is a major dairy exporter and its milk powder and formula industry is likely to benefit from a baby boomlet in China. The kiwi dollar jumped to $0.6763 from $0.6699 the day before. Shares of baby-related stocks also posted big gains. Stroller maker Goodbaby International was up 2.3 percent in Hong Kong and Beingmate Baby & Child Food vaulted 10 percent in Shenzhen.
Investors increasingly believe the U.S. Federal Reserve will raise its benchmark interest rate from a record low in December. Data on Thursday showed the U.S. economy cooled during the third quarter but that was largely due to transitory changes in inventory levels and the underlying picture is in line with the Fed's view of a moderately strong economy. Super low interest rates have been a boon for stock markets for several years.
The soft third quarter American growth "is unlikely to be an excuse for the Fed to hold off a rate hike," said Bernard Aw, market strategist at IG in Singapore. "As long as the jobs data resumes a strong upward trajectory, shrugging off the soft patch in August and September, alongside improvement in the inflation numbers, the case for a December liftoff remains alive," he said in a market commentary.
Japan's Nikkei 225 rose 0.8 percent to 19,083.10 after the Bank of Japan left its super-easy monetary policy unchanged but kept the door open to extra stimulus if risks to growth increase. The index rose 12.7 percent for the month. Hong Kong's Hang Seng fell 0.8 percent to 22,640.04 and South Korea's Kospi shed 0.2 percent to 2,029.47. China's Shanghai Composite was little changed at 3,382.56 but rose 11.3 percent for the month. Australia's S&P/ASX 200 slipped 0.5 percent to 5,239.40. Stock benchmarks fell in Taiwan, Singapore the Philippines and Indonesia, but rose in Thailand.
Benchmark U.S. crude was down 44 cents to $45.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 12 cents to $46.06 a barrel in New York on Thursday. Brent crude, which is used to price international oils, lost 30 cents to $48.50 a barrel in London.
The dollar fell to 120.75 yen from 120.95 yen on Thursday. The euro was little changed at $1.0998 from $1.0990.