European and Asian stock markets diverged Friday with traders contemplating further hikes to interest rates as inflation stays high despite a recent cooling of consumer-price rises.
The week witnessed a mixture of rate decisions from central banks, notably a pause from the US Federal Reserve, which were accompanied by warnings that borrowing costs would stay elevated for some time.
"Stocks are ending the week under pressure as bond yields lurch to fresh cycle-highs following the Fed's hawkishness and a raft of central bank announcements that cement the view that -- in most cases -- rates are going to stay higher for longer," noted Neil Wilson, chief market analyst at Finalto.
A number of Fed policymakers have said they were confident the United States can avoid a recession even as they push rates to two-decade highs.
The Bank of England on Thursday decided against hiking its interest rate for a 15th time in a row, leaving it at 5.25 percent, the highest level since 2008.
London's stock market rose Friday approaching the half-way stage while major eurozone indices declined.
A key survey showed eurozone economic activity shrank further in September but at a slower rate.
UK data revealed retail sales had rebounded in August, offsetting news that contraction in the country's private sector had picked up speed this month.
In Asia on Friday, the Bank of Japan stuck to its long-term programme of sub-zero borrowing costs.
It comes as BoJ officials face increasing pressure to turn more hawkish as the yen weakens and after fresh data showed inflation remains stubbornly high.
Ahead of Wall Street reopening, Xbox-owner Microsoft closed in on its $69-billion takeover of "Call of Duty" video-game maker Activision Blizzard after the UK said a revamped deal addressed regulatory concerns.
The US tech titan launched its bid early last year, seeking to establish the world's third biggest gaming firm by revenue after China's Tencent and Japan's PlayStation maker Sony.
- Key figures around 1100 GMT -
- London - FTSE 100: UP 0.7 percent at 7,731.60 points
- Frankfurt - DAX: DOWN 0.1 percent at 15,564.91
- Paris - CAC 40: DOWN 0.4 percent at 7,186.70
- EURO STOXX 50: DOWN 0.1 percent at 4,207.90
- Tokyo - Nikkei 225: DOWN 0.5 percent at 32,402.41 (close)
- Hong Kong - Hang Seng Index: UP 2.3 percent at 18,057.45 (close)
- Shanghai - Composite: UP 1.6 percent at 3,132.43 (close)
- New York - Dow: DOWN 1.1 percent at 34,070.42 (close)
- Euro/dollar: DOWN at $1.0637 from $1.0661 on Thursday
- Pound/dollar: DOWN at $1.2247 from $1.2292
- Dollar/yen: UP at 148.24 yen from 147.57 yen
- Euro/pound: UP at 86.87 pence from 86.71 pence
- Brent North Sea crude: UP 0.8 percent at $94.03 per barrel
- West Texas Intermediate: UP 1.2 percent at $90.66 per barrel