Markets rise on better-than-expected US growth

Visa and Mastercard are among companies publishing earnings reports. ©AFP

New York (AFP) - Stock markets rose Thursday as US data showed the world's biggest economy finished the year on a stronger note than anticipated.

Shares in Paris, Frankfurt and London closed higher, with Wall Street stocks rallying.

US gross domestic product exceeded expectations to rise at an annual rate of 2.9 percent in the fourth quarter, according to official data.

It marked a second straight quarter of growth after two rounds of contraction.

For 2022 as a whole, the US economy grew at a slower pace than the previous year, expanding 2.1 percent, the Commerce Department said.

"The weaker GDP print compared to the previous reading means the economy is slowing, but the above-forecast number will ease recession fears at the same time," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"They call this the 'goldilocks' scenario," he said.

Among key US indicators, the tech-heavy Nasdaq Composite Index gained 1.8 percent, boosted by Tesla's strong results.Tesla shares soared 11 percent after reporting record quarterly earnings.

Meanwhile, American Airlines rose 2.2 percent as it offered a confident outlook on 2023 travel demand.

The world's top luxury group LVMH said Thursday that its sales and net profit both hit new heights last year, driven by strong demand in Europe, the United States and Japan.

Oil rose on hopes of growing Chinese demand after the country lifted Covid restrictions.

- Fed watch -

Investors are also focused on the US Federal Reserve's next moves, after the central bank hiked rates rapidly last year in a bid to tame surging inflation.

The Fed will make its latest policy decision next week.In December, it slowed its pace of rate hikes after four straight steep 0.75-point increases.

Speculation has been building in recent weeks that the bank could take its foot off the pedal as data points to inflation coming down more quickly than expected.

Other indicators also suggest last year's tightening was taking hold in the economy.

While there remains some concern that the US could tip into recession, there is growing hope it can achieve a so-called soft landing.

Traders are also eyeing the Fed's preferred inflation gauge, due on Friday.

In Asia, Hong Kong led the way again to hit an 11-month high, helped by hopes that China's reopening will fuel a strong recovery this year.

But uneven earnings from tech giants largely kept sentiment in check.

Still, Asia continued to outperform after a strong start to the year.