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| - The effect of reassurances by US Federal Reserve chief Jerome Powell on interest rate hikes faded Thursday as US stocks opened lower and gains in Europe thinned. Wall Street jumped on Wednesday, with the Dow hitting another record, but it edged lower in initial trading, giving up 0.1 percent. The S&P 500 and Nasdaq Composite also moved lower. In Europe, London stocks were up 0.3 percent, Paris added 0.1 percent, and Frankfurt turned 0.1 percent lower. Powell on Wednesday again reiterated the US central bank's commitment to keeping the financial taps wide open until inflation was sitting persistently at its two percent target and unemployment had been tamed. Addressing fears that inflation could jump too sharply, Powell stated that rising prices are "a different thing from persistent high inflation, which we do not expect and if we do get, then we have the tools to deal with it". Oanda analyst Craig Erlam said that Powell's soothing tones -- along with some positive news on the pandemic front, helped boost stocks late on Wednesday, "but already we're seeing that fade" as yields on bonds continue to rise. "Despite Powell's assurances, investors are growing increasingly convinced that higher inflation will prompt central banks to tighten sooner," he added. In addition to rising yields US Treasuries, the rate on 10-year French government bonds rose above zero for the first time since June 2020. Yields on German government 10-year bonds have also been rising if they still remain in negative territory. The rising yields on government bonds, or the rate of return for investors, may indicate higher inflation expectations as the economies rebound from the pandemic. "Yields are rising across the board, a sign of confidence in the global economy to recover powerfully in the post-pandemic world," said Erlam. "But it's also a massive headache for central banks keen to remain extremely accommodative in the early stages of the recovery," he added. Equities have soared in recent months on optimism over a vaccines-propelled global economic recovery, but fears persist that imminent US government stimulus will fuel inflation and force the Federal Reserve to reverse its ultra-loose monetary policy. World markets have become jittery over the prospect of higher borrowing costs just as US President Joe Biden's $1.9 trillion pandemic stimulus package is set for its first big legislative test when the US House of Representatives votes on it on Friday. Oil prices briefly hit fresh 13-month peaks on keen demand before turning lower, while the European single currency rose against the dollar on Powell's remarks. Asian equities steamed ahead on the latest reassurances from the Fed. London - FTSE 100: UP 0.3 percent at 6,678.32 points Paris - CAC 40: UP 0.1 percent at 5,803.80 Frankfurt - DAX 30: DOWN 0.1 percent at 13,959.82 EURO STOXX 50: FLAT at 3,705.49 New York - Dow: DOWN 0.1 percent at 31,931.47 Tokyo - Nikkei 225: UP 1.7 percent at 30,168.27 (close) Hong Kong - Hang Seng: UP 1.2 percent at 30,074.17 (close) Shanghai - Composite: UP 0.6 percent at 3,585.05 (close) Euro/dollar: UP at $1.2223 from $1.2166 at 2200 GMT Pound/dollar: UP at $1.4161 from $1.4141 Euro/pound: UP at 86.32 pence from 86.03 pence Dollar/yen: UP at 106.17 yen from 105.87 yen Brent North Sea crude: DOWN 0.5 percent at $66.72 per barrel West Texas Intermediate: DOWN 0.4 percent at $62.97 per barrel burs-rl/lc
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