Stocks rise on AI optimism, US rate-cut hopes

Stock markets struck fresh records on Friday, driven by investor optimism over artificial intelligence and US rate-cut hopes, which overshadowed concerns about a government shutdown dragging on.

Wall Street's main indices pushed higher, with both the S&P 500 and Nasdaq Composite setting new all-time highs.

While the gains have been incremental, "what counts is that there still isn't any convincing show of selling force", said Briefing.com analyst Patrick O'Hare.

In Europe, London's FTSE 100 set an all-time high, led by banks and mining stocks. In Paris the CAC 40 also rose and was close to its March peak, while the DAX 40 dipped in Frankfurt but nevertheless remains close to its record level.

The rally in tech stocks was given another lift on Friday by an agreement between Japan's Hitachi and ChatGPT developer OpenAI to work on AI and energy.

Shares in Hitachi jumped more than 10 percent, with other Japanese tech firms and investment giant SoftBank following suit. 

The advance helped push Tokyo's Nikkei 1.9 percent higher.

Hong Kong retreated, while Shanghai was closed for a holiday.

A surge in AI investment this year has helped push the valuations of some of the sector's biggest names to eye-watering levels -- with US chip titan Nvidia topping $4 trillion -- and several stock markets to record highs.

Shares in Nvidia also rose and were close to the all-time high they set on Thursday.

This week has seen extra momentum after South Korean semiconductor giants Samsung and SK hynix said they had struck a preliminary deal with the OpenAI to supply chips and other equipment for its Stargate project.

Positive sentiment has also been supported by data in recent months pointing to a slowdown in the US labour market, which led the Federal Reserve to cut borrowing costs and indicate more easing could come.

Traders brushed off a standoff in Washington that has seen the government partially shut down, leading to the closure of some services and the delay of key jobs figures that would normally have been published on Friday.

While the readings on non-farm payrolls (NFPs) is a major guide for the Fed when deciding monetary policy, analysts said the shutdown was unlikely to deter the Fed from an expected second rate cut this month.

"Markets seem to have taken this political impasse in their stride, showing little sign of stress," said Joshua Mahony, chief market analyst at Scope Markets.

"The lack of market reaction highlights how little investors believe the shutdown will matter for the medium-term outlook on growth or interest rates," he added.

A Senate vote is expected Friday on a House-passed resolution to keep the government funded at current levels through November 21.

The positive mood on trading floors has also helped bitcoin regain some of its mojo, striking back above $120,000 for the first time since mid-August when it hit a record 124,515.

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- Key figures at around 1530 GMT -

New York - Dow: UP 0.7 percent at 46,844,90 points

New York - S&P 500: UP 0.4 percent at 6,742.84

New York - Nasdaq Composite: UP 0.3 percent at 22,906.54

London - FTSE 100: UP 0.7 percent at 9,491.25 (close) 

Paris - CAC 40: UP 0.3 percent at 8,081.54 (close)

Frankfurt - DAX: DOWN 0.2 percent at 24,378.80 (close)

Tokyo - Nikkei 225: UP 1.9 percent at 45,769.50 (close)

Hong Kong - Hang Seng Index: DOWN 0.5 percent at 27,140.92 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.1744 from $1.1720 on Thursday

Pound/dollar: UP at $1.3477 from $1.3446

Dollar/yen: UP at 147.39 yen from 147.19 yen

Euro/pound: DOWN at 87.15 pence from 87.17 pence

West Texas Intermediate: UP 0.9 percent at $61.02 per barrel

Brent North Sea Crude: UP 0.8 percent at $64.62 per barrel

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