Stocks mixed as rate-hike fears resurface

The dollar has firmed on prospects of more US rate-tightening. ©AFP

London (AFP) - Stock markets traded mixed Monday over concerns that central banks may have to wait longer than expected to end their policy of raising interest rates.

In Europe, London's FTSE 100 rose but the Paris CAC 40 fell in afternoon deals after reaching a fresh record-high at 7,552 points earlier in the day.

Wall Street rose in morning trades as investors prepare for a raft of corporate results in the United States this week that could give insight into the health of the world's biggest economy.

The dollar firmed on prospects of more US rate-tightening and oil prices slipped.

While analysts say cooler inflation has eased pressure on the US Federal Reserve, European Central Bank and Bank of England to keep raising borrowing costs, consumer prices remain elevated.

"I don't think all of the rate hikes have worked their way through the system and it looks as though the Fed is going to continue to tighten," said Frances Stacy, at Optimal Capital Advisors.

"I don't think we're completely out of the woods yet," Stacy added following data Friday showing a sizeable drop in US retail sales.

Markets fear that the monetary tightening by central bankers will tip the economy into recession.

The collapse of US regional banks last month was largely blamed on the higher interest rates, which brought down the value of bond portfolios.

Forecast-beating earnings from US banking titans last week further eased concerns about the sector.

While JPMorgan reported a surge in profits to $12.6 billion last week, it also took additional reserves, citing "an increased probability of a moderate recession due to tightening financial conditions".

"That word -- recession -- is hanging over the market, not like a death sentence at this point but more so like a chronic illness, which is to say the market is having difficulty escaping from it," said Briefing.com analyst Patrick O'Hare.

Other major companies are releasing first-quarter results this week, including Bank of America, Morgan Stanley, Johnson & Johnson, Netflix, Tesla, Ericsson and Nokia.

Elsewhere, traders were keenly awaiting the release of Chinese growth data Tuesday that provides the first snapshot of how the economy has fared without painful zero-Covid restrictions.

Analysts polled by AFP expect an average of 3.8 percent year-on-year growth in January-March.