LONDON: Global stock markets seesawed on Friday at the end of a tumultuous week marked by concerns about soaring inflation and a possible US debt default.
US indices opened higher but the tech-heavy Nasdaq retreated later and the S&P 500 turned flat.
European markets had a choppy day, with London's FTSE 100 and Frankfurt's DAX tumbling in afternoon trading while the Paris CAC 40 wobbled from gains to losses.
That followed heavy losses earlier in Asia.
"The markets are likely to remain volatile as Q4 (fourth quarter) begins with October another historically choppy period after September's wild ride for the markets that saw the S&P 500 snap a seven-month winning streak," said analysts at Charles Schwab.
Analysts said US markets were initially cheered by news that pharmaceutical giant Merck would seek authorisation in the United States for an oral drug against Covid-19 that performed well in clinical trials.
But that good news was offset by inflation data. The US Commerce Department's personal consumption expenditures price index was up 4.3 percent from August 2020 as the world's largest economy struggles with supply chain delays and shortages amid its bounceback from the pandemic's business closures.
"The news out of Washington hasn't been as encouraging," said Briefing.com analyst Patrick O'Hare.
**- Inflation deflates sentiment -**In Europe, too, investors were concerned about showing soaring inflation.
Eurozone consumer prices surged in September by 3.4 percent on an annualised basis -- the fastest pace since 2008 -- as energy costs rocketed.
Most global central banks insist that the current inflation spike is temporary, but investors remain fearful that tighter monetary policy could further damage any post-Covid recovery.
The inflation news "probably has not helped general sentiment", Interactive Investor analyst Richard Hunter told AFP.
"Having said that, the European Central Bank is singing from the same song sheet as the other major central banks in assuming that the elevated level of inflation is transitory."
"Time will tell" whether the ECB would need "some tightening action in due course", he said.
Investors are preparing for the Federal Reserve to start tapering its massive bond-buying programme before the end of the year.
An increase in government bond yields in the United States and Europe had also unnerved investors earlier this week.
All three main indexes on Wall Street ended in the red on Thursday, with the S&P shedding more than four percent in September.
Asia followed suit with Tokyo losing 2.3 percent.
Sydney shed two percent despite news that Australia will begin to reopen its borders in November after 18 months of restrictions. Hong Kong and mainland Chinese markets were closed for a holiday.