Stocks close out tough quarter on economic fears

LONDON ― European markets advanced on Friday, gaining some respite from a torrid week as the third quarter drew to a close.

The pan-European Stoxx 600 added 1% in early trade, with oil and gas stocks climbing 2.2% to lead gains as all sectors and major bourses entered positive territory.

Global stocks struggled in recent sessions amid fears over slowing growth and aggressive monetary policy tightening.

The widespread sell-off on Wall Street continued on Thursday, with all three major averages falling sharply as investors assessed the outlook for future rate-hiking decisions from the U.S. Federal Reserve and their impact on the markets. The S&P 500 hit a fresh low for the year. Stock futures were mixed in early premarket trade on Friday.

Shares in Asia-Pacific also retreated on Friday following the overnight plunge stateside, though new data showed Chinese factory activity unexpectedly expanded in August.

Investor focus in Europe on Friday will shift to initial euro zone inflation figures for September, due at 10 a.m. London time, with economists expecting annual consumer prices to have increased by a fresh record high of 9.7%.

Volatility continues in U.K. markets after the Bank of England intervened in the bond market on Wednesday in order to shore up the country’s financial stability, after a historic sell-off in long-dated gilts. Sterling also hit an all-time low on Monday following the new government’s widely condemned fiscal policy announcements, but has staged a significant rally in recent days.

Stateside, several Fed officials are due to speak on Friday afternoon, and the markets will be watching closely for indications as to the pace of future rate hikes from the central bank.