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European equity markets recovered and closed higher on Friday, with the benchmark Stoxx 600 rising 0.3% to an over 9-month high at above 460 and the London’s FTSE 100 hit a record high following a slide in the pound. Domestically, however, the German DAX retreated 0.2%. Investors worried that the ECB and the Federal Reserve could keep interest rates higher for longer following the releases of higher-than-expected PPI numbers from the Eurozone and stronger-than-expected job growth in the US. On Thursday, stocks rallied on hopes of the global rate hiking cycle nearing an end after the ECB, Bank of England, and US Fed hiked interest rates as expected. On the corporate front, Sanofi was under pressure after forecasting moderate 2023 earnings growth, while TomTom surged after raising its 2023 guidance following better-than-expected Q4 revenue.

The Dow closed more than 100 points lower on Friday, and the S&P 500 and Nasdaq 100 dipped in negative territory by 1% and 1.6%, respectively, as strong job reports signaled that the Fed will continue its tightening cycle pushing rates above 5%. The Labor Department's closely watched employment report showed that US employers hired more workers than expected in January, with nonfarm payrolls increasing by 517,000 jobs last month. On top of that, ISM data showed that the services sector, which accounts for more than two-thirds of US economic activity, rebounded sharply in January. Traders also digested disappointing earning results from Alphabet (-2.7%), and Amazon (-8.4%) that dragged them down, while Apple rebounded from early losses and finished 2.4% higher. For the week, the Nasdaq 100 rallied 4.1%, marked the fifth consecutive weekly gain. The S&P 500 added almost 2% and posted second straight weekly gain, while the Dow lost 0.1%.

The BSE Sensex added roughly 910 points, or 1.5% to close at an over one-week high of 60,842 on Friday, the fifth straight session of rises and booking a 2.5% weekly gain. Financials provided the main support ahead of earnings of the country's largest lender State Bank of India and after clarification from life insurers SBI Life and HDFC Life addressing investor concerns regarding the latest budget proposals. On the budget front, India will spend INR 10 trillion on capital expenditure in FY 2023/24, higher than INR 7.5 billion in the current year.

The S&P/ASX 200 Index climbed 0.62% to close at 7,558 on Friday, hitting its highest levels in over nine months, as gains in heavyweight financial and healthcare stocks outweighed losses in the mining sector. The “Big Four” banks led the market higher, with strong gains from Commonwealth Bank (1.4%), ANZ Group (2.3%), Westpac Banking (1.8%) and NAB (1.4%). Healthcare and technology stocks also advanced, including CSL Ltd (3%), Resmed Inc (1%), Sonic Healthcare (1.4%), Computershare (3.8%) and Seek (1%). Meanwhile, mining companies fell on weaker metals prices, with losses from BHP Group (-1.9%), Rio Tinto (-2%), Fortescue Metals (-1.3%), Newcrest Mining (-2.9%) and Northern Star Resources (-4%). Insurance firms also tumbled due to expected hits from Auckland floods and higher inflation, with sector leader IAG Insurance losing 2.1%.

The Nikkei 225 Index rose 0.39%% to close at 27,509 while the broader Topix Index gained 0.26% to 1,970 on Friday, with the former reaching seven-week highs as Japanese technology stocks tracked their US peers higher.. Gains in the technology sector were led by Keyence (1%), Murata Manufacturing (2.7%) and Recruit Holdings (2.6%). Z Holdings also surged 12.2% after announcing late on Thursday that it will merge with its two wholly-owned subsidiaries Yahoo Japan and LINE in an effort to revamp operations and speed up decision-making. Interest rate-sensitive healthcare, consumer and financial stocks gained as well. Meanwhile, Japan Airlines tumbled 3.6% even after posting strong profits for the nine months to December, as the company revised down its annual net profit estimate to 25 billion yen from 45 billion yen.

The Shanghai Composite fell 0.68% to close at 3,263 while the Shenzhen Component dropped 0.63% to 12,054 on Friday, hitting their lowest levels in a week as investors digested data showing private sector activity in China turned expansionary in January, reducing pressure on authorities to maintain an accommodative stance. Nearly all sectors in China declined, with notable losses from heavyweight firms such as Kweichow Moutai (-1%), Longi Green Energy (-3.4%), BYD Company (-2.5%), Contemporary Amperex (-2.1%) and Ping An Insurance (-2.4%). Meanwhile, technology stocks resisted the selloff, with gains from China National Software (6.1%), iFLYTEK (2.3%) and TRS Information (5.8%).

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