LONDON (AP) — Stocks rebounded Friday after two days of losses though investors remained wary ahead of elections in Italy that could dominate the market mood at the start of next week.
The pick-up comes after a sizeable sell-off, which started in the second half of Wall Street's trading session on Wednesday following the release of the minutes to the last policy meeting of the U.S. Federal Reserve. The minutes sparked by fears the Fed would abandon its super-easy monetary policy sooner than many in the markets were predicting.
Those concerns about future U.S. monetary policy remain. And others have the potential to reignite the jitters. The Italian election, for one, which takes place Sunday and Monday, could stoke renewed worries over Europe's debt crisis — especially if there is a protracted period before a new government is formed.
"Global markets are seeing some legitimate bounce-back from yesterday's sell-off but remain fragile as the weekend Italian elections loom," said Sal Guatieri, an analyst at BMO Capital Markets.
In Europe, the FTSE 100 index of leading British shares was up 0.7 percent at 6,335 while Germany's DAX rose 1.03 percent to 7,661. The CAC-40 in France was 2.25 percent higher at 3,706.
A solid German economic survey also shored up sentiment in Europe. The Ifo index rose to 107.4 in February from 104.3 the previous month. It was the fourth monthly increase in a row and well above the 104.9 points expected by financial market analysts.
A recovering Germany will go a long way to supporting economic growth across Europe, not least in the economy of the 17 European Union countries that use the euro. That hope helped European markets look beyond the latest forecast from the European Commission, the EU's executive arm, that the eurozone's recession will last longer than it previously thought.