Stock markets jump before key US inflation data

China's Covid lockdowns have sparked fears about global supply chains. ©AFP

London (AFP) - Stock markets rose solidly Wednesday as investors awaited the latest inflation print from the United States that could show the rate of price increases finally slowing in the world's biggest economy.

While the Federal Reserve and other central banks are rising interest rates to tackle decades-high inflation, its eurozone peer has been reluctant to follow suit.

But on Wednesday, European Central Bank president Christine Lagarde hinted that it could raise interest rates from historic lows as soon as July.

"US inflation data...will be front-and-centre for markets amid concerns that rising price levels could push the world's largest economy into recession," noted Victoria Scholar, head of investment at Interactive Investor.

"While the data is expected to ease...stronger-than-expected inflation figures could put pressure on equities and lift the dollar."

Ahead of the inflation number, equities won a boost also from US President Joe Biden's administration looking at possibly lifting trade tariffs on China to try and control inflation.

"That has given US equity futures a leg up today," said Jeffrey Halley, senior market analyst at OANDA.

European stock markets charged higher around the halfway stage after major Asian indices advanced.

Equities have been on another roller-coaster ride this week amid high inflation concerns, the Russian invasion of Ukraine and impact of China's Covid-19 lockdowns on supply chains.

Global investors have been spooked by China's sinking April exports -- the lowest in almost two years -- as well as data showing its consumer inflation had risen at the quickest pace in nearly half a year.

On the corporate front Wednesday, Marlboro-maker Philip Morris International said it had offered $16 billion to acquire smokeless tobacco company Swedish Match as the US group aims to move away from its traditional cigarette business.

The board of Swedish Match recommended that its shareholders accept the bid of 106 Swedish kronor per share, nearly 40 percent above its closing share price on Monday, the companies said.

The deal would total 161.2 billion Swedish kronor (15 billion euros).