LONDON/SYDNEY—World stocks rose on Friday, recovering from the previous session’s 2–1/2 year lows on an overnight rally in U.S. stocks, while British government bonds rose on speculation of a U-turn on the country’s fiscal plans.
Much-anticipated U.S. data on Thursday showed core inflation—which excludes food and fuel prices— came in above forecasts at 6.6 percent, the biggest annual increase in 40 years, driven by large price gains in the services sector.
The data reinforced views that interest rates would stay higher for longer, hastening the risk of a global recession.
U.S. stocks, however, surged to close more than 2 percent higher, as investors covering short bets drove a dramatic rebound from an earlier selloff….