10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European market edged higher led by a rising stocks in steel and energy sectors. Inflation across EU member states in March rose to 3.6%.

Global Markets Update

Annualized inflation in the European Union rose to 3.6% in March from 3.3% in February on rising food and energy and education prices. The Netherlands and the UK reported lowest inflation of 1.9% and 2.5% but Latvia and Bulgaria reported the highest inflation of 16.6% and 13.2% respectively in the EU member states.

The news of strong rise in March inflation pushed euro near record high against dollar and dashed hopes of any rate reduction in the next five weeks.

European stocks gained ground for the second day following the footsteps of the U.S. stocks. UK led the region with a rise of 2.4% followed Germany, France and Switzerland. Rising inflation, strong euro against the dollar and pound and weak sentiment in the financial sector was overshadowed by earnings expectations in tech and financials after the earnings release from Intel and JP Morgan.

Deutsche Bank added 3% to 74.61 euros, Arcelor Mittal increased 3.3% to 54.90 euros, LVMH increased 4% to 69.20 euros, and TeliaSonera soared 12% after Le Figaro reported a possible takeover bid from France Telecom.

L’Oreal reported first quarter sales increase of 2.1% to 4.36 billion euros despite negative effect of currency rate of 6%. Sales in the Western Europe increased 1% but in North America declined 7.1%. L’Oreal fell 7.5% to 73.50 euros after the earnings and downgrade from UBS to ‘neutral’ from ‘buy.’

U.S. stocks edged higher after March inflation and industrial production increased 0.3%. Housing starts in the month fell 12% to a level last seen in 1991. Separately, earnings from Wells Fargo, JP Morgan, Coca Cola, CSX, and Intel lifted sentiment. Wells Fargo and JP Morgan hinted that credit market turmoil may be near end. Intel surged after it reported healthy sales and met earnings expectations. Talbots trades sharply lower on lack of bank credits.

JP Morgan reported net income declined to $2.4 billion or 68 cents per share compared to $4.8 billion or $1.34 a share a year ago. Sharp losses in mortgage securities, home equity loans and leveraged loans affected the earnings. In the quarter, the bank took $2.5 billion charge of which $1.1 billion is related to home equity loans. The bank also received $1.5 billion in the stake sale of credit card processor Visa through initial public offering.

Stocks in Japan rose after the credit market worries eased and earnings from Intel lifted tech stocks. In Tokyo trading Nikkei 225 rose 1.2% or 155.55 to 13,146.13, and the broader Topix Index gained 1.4% or 17.59 to 1,273.56. Electric utilities have initiated contract negotiations with Xstrata and hope keep the coal at prices level from Australia.

GDP in the first quarter in China dipped to 10.6% from 11.7% a year ago, industrial production rose 16.4% and inflation to 8%. Food prices in the quarter surged 21% on tough weather conditions and rising fuel prices in the international markets. Retail prices in the quarter rose 7.4% and producer prices increased 6.9%. The news sent stocks lower in China and Hong Kong on the worries that the government will take measures to tighten the economy further.

Stocks in India edged higher after a rally in tech stocks. Infosys earnings lifted the tech sector for the second day in a row. Rallies India soared 6% after it reported earnings of 115% to 125 crore rupees and sales increase of 7.6% to 692 crore rupees for the year ended in March. Nicholas Piramal agreed to purchase antibiotics and pain killers drugs from Khandelwal Labs for 116 crore rupees.

UK stocks surged after rally in the U.S. stocks, lower than expected unemployment and possible help from the Bank of England to ease credit markets. Rise in crude oil and precious metals prices helped miners to recover. BHP, Rio Tinto and Antofagasta led the gainers. HSBC, Royal Bank of Scotland and Barclays rose after the earnings report from JP Morgan met analysts expectations. FTSE 100 gained 2.36% or 139.3 to 6,046.20.

Australian stocks raced ahead on rising crude oil and metals prices. ASX 200 index in Sydney added 1.3% or 70 to close at 5,470.30. Woolworths reported its third quarter sales increase of 10.2% on rising sales of wine and groceries. Rio Tinto reported global first quarter iron ore production increase of 16% however copper production declined. Zirconia maker Iluka reported completion of retail stock offering as it completes $1 billion of debt and stock placement.

European Markets indexes

In London FTSE 100 Index closed higher 139.30 or 2.36% to 6,046.20, in Paris CAC 40 Index increased 74.42 or 1.56% to close at 4,855.10 and in Frankfurt DAX index higher 117.79 or 1.79% to close at 6,702.84. In Zurich trading SMI increased 63.28 or 0.88% to close at 7,250.70.

North American Markets indexes

Dow Jones Industrial Average gained 256.80 or 2.08% to a close of 12,619.27, S&P 500 closed up 30.28 or 2.27% to 1,364.71, and Nasdaq Composite Index increased 64.07 or 2.80% to close at 2,350.11. In Toronto TSX Composite closed up 248.53 or 1.79% to 14,099.48.

Of the 30 stocks in Dow Jones Industrial Average, 28 closed higher, 2 closed lower, and none was unchanged.

JP Morgan led the gainers in the Dow Jones index with a rise of 6.3% followed by increases in Intel of 5.9%, in DuPont of 4.5%, in General Motors of 4.1%, and in Caterpillar of 3.9%.