London (AFP) - European stock markets rose robustly on Friday as official data showed eurozone growth holding up in the face of soaring inflation.
Stock markets in Asia ended the session lower after data showed that the US economy contracted again, reinforcing recession fears.
Wall Street opened higher, adding to Wednesday's rally on expectations that the US Federal Reserve will slow its pace of interest rate hikes.
After an extended period of pessimism on trading floors, investors were beginning to speculate that the market may be bottoming out.
The EU's official data agency said the 19-country eurozone's economy grew by 0.7 percent in the second quarter, even though inflation rose to a new record of 8.9 percent in July.
A day earlier, US data showed the world's biggest economy shrank by 0.9 percent in the period from April to June after already contracting by 1.6 percent in the preceding three months.
But the reading was taken as a sign of good news, since it could give the Fed room to take its foot off the pedal and treasury yields -- considered a barometer of future interest rates -- eased.
Officials were expected to continue raising US interest rates, but analysts estimate they would announce a half-point rise in September, compared with three-quarters of percentage point at the past two meetings.
"Stocks continued their rally in Europe on Friday ...as market sentiment improved following reassuring macro data in addition to positive corporate results," said ActivTrades analyst Pierre Veyret.
The prospect of US interest rates not rising as fast as previously expected has knocked the dollar slightly after soaring against other major currencies in recent months.
A second successive contraction in growth is widely considered a technical recession, although it is not officially considered so in the United States until identified as such by the National Bureau of Economic Research.
But while debate rages over that issue, the consensus is that the economy is struggling.
"The more important point is that the economy has quickly lost steam in the face of four-decade high inflation, rapidly rising borrowing costs, and a general tightening in financial conditions," said Sal Guatieri, of BMO Capital Markets.
China is also struggling, hit by Covid-induced lockdowns in major cities including Shanghai and Beijing that have hammered all sectors and supply chains.
The euro failed to get much mileage from the surprisingly good eurozone growth figures as investors focused on the inflation data, which was worse than expected.
"This means that consumers are facing even more pressure on their disposable incomes, which should translate into lower spending and thus weaker economic activity," said Fawad Razaqzada at City Index and FOREX.com.
After initially rising after the data release, it later fell back against the dollar.
Crude prices jumped by three percent as traders focused on supply concerns, with the main US contract, WTI, rising back above $100 per barrel.
"Oil prices are rising again amid reports that OPEC+ will leave output targets unchanged next month when it meets on Wednesday," said Craig Erlam at OANDA trading platform.
Key figures at around 1330 GMT
London - FTSE 100: UP 1.0 percent at 7,446.27 points
Frankfurt - DAX: UP 1.3 percent at 13,449.94
Paris - CAC 40: UP 1.8 percent at 6,453.45
EURO STOXX 50: UP 1.4 percent at 3,704.06
New York - Dow: UP less than 0.1 percent at 32,534.12
Tokyo - Nikkei 225: DOWN 0.1 percent at 27,801.64 (close)
Hong Kong - Hang Seng Index: DOWN 2.3 percent at 20,156.51 (close)
Shanghai - Composite: DOWN 0.9 percent at 3,253.24 (close)
Euro/dollar: DOWN at $1.0158 from $1.0197 Thursday
Pound/dollar: DOWN at $1.2081 from $1.2177
Euro/pound: UP at 84.10 pence from 83.70 pence
Dollar/yen: UP at 134.35 yen from 134.25 yen
Brent North Sea crude: UP 3.0 percent at $110.39 per barrel
West Texas Intermediate: UP 3.8 percent at $100.12 per barrel
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