Portugal Colonial - Markets diverge with US inflation in focus

The showing comes at the end of a rollercoaster week for equities, but the Middle East crisis continued to cast a shadow as Israel said ground forces had raided central Gaza for a second day.

And while figures showed the US economy enjoyed its best growth since late 2021 during the third quarter, observers said there was a belief it had peaked and the new year would see a slowdown.

However, questions remain over how long the Federal Reserve will keep interest rates at elevated levels.

All three main indexes sank Thursday, with the Nasdaq again the worst performer owing to tech firms' susceptibility to higher borrowing costs.

But blockbuster earnings from Amazon and Intel after the markets closed -- and a surge in after-hours trade -- provided Asian traders with a boost.

In Europe, Frankfurt and London pushed higher but Paris lapsed into the red.

Eyes now turn to the release later on Friday of the personal consumption expenditures (PCE) price index, which is the Fed's preferred measure of inflation.

A slight easing of the core reading -- released Thursday -- provided some optimism.

The data comes ahead of the Fed's policy decision next week, and while expectations are for it to pause, traders are hoping for guidance for the next few months.

Officials have lined up in recent months to say that while there might not be any more cuts, rates could be kept at two-decade highs for an extended period.

Still, with Treasury yields sitting around 16-year highs, experts do not foresee a recovery in markets any time soon.

"The stock market isn't ready to rally until bond yields are sharply lower, which probably won't happen until we see inflation a lot closer to the Fed's target," said OANDA's Edward Moya.

Oil prices rallied two percent, recovering much of their losses from Thursday, as traders tracked developments in the Israel-Hamas war amid concerns it could draw in other countries.

The drop came even after the Israeli military reported Friday more attacks by ground forces, which followed news that tanks and infantry had entered Gaza in a "targeted raid" before withdrawing to home soil.

Aircraft also struck targets in Lebanon late Wednesday in retaliation for a missile launch.

Fears of a region-wide conflict were stoked after Iran's foreign minister warned the United States it would not go unaffected if the hostilities spread.

- Key figures around 1115 GMT -

London - FTSE 100: UP 0.1 percent at 7,361.74 points

Frankfurt - DAX: UP 0.3 percent at 14,774.28

Paris - CAC 40: DOWN 0.9 percent at 6,829.39

EURO STOXX 50: DOWN 0.3 percent at 4,036.92

Tokyo - Nikkei 225: UP 1.3 percent at 30,991.69 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 17,398.73 (close)

Shanghai - Composite: UP 1.0 percent at 3,017.78 (close)

New York - Dow: DOWN 0.8 percent at 32,784.30 (close)

Euro/dollar: DOWN at $1.0551 from $1.0563 on Thursday

Dollar/yen: DOWN at 150.08 yen from 150.43 yen

Pound/dollar: DOWN at $1.2124 from $1.2129

Euro/pound: DOWN at 87.04 pence from 87.08 pence

Brent North Sea crude: UP 2.0 percent at $89.68 per barrel

West Texas Intermediate: UP 2.2 percent at $85.01 per barrel

L.Torres--PC