Stocks extend gains after sell-off amid positive data, Fed's rate signals

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LONDON/NEW YORK, Aug 9 - Global shares extended gains on Friday, recovering further from their recent big sell-off and boosted by positive economic data and signals from Fed policymakers that they could cut rates as early as September.

On Wall Street, all three indexes pared early session losses and were trading higher led by gains in technology, consumer discretionary, healthcare and financial stocks. Divergent central bank interest rate moves, a repricing of recession probability in the United States, thinner liquidity in August accentuating volatility, and Middle East tensions had all combined a week ago to trigger the sharp sell-off in stocks after their months-long winning streak. "We are still in the month of August, so we can still have some volatility," said Marie de Leyssac, portfolio manager at Edmond de Rothschild Asset Management.

Before then, investors will scrutinise next week's U.S. consumer prices and retail sales figures for fresh evidence on chances of the economy escaping a hard landing. Japan's Nikkei , stocks benchmark closed 0.6% higher, erasing most of the losses since a 12.4% crash on Monday. MSCI's broadest index of Asia-Pacific shares outside Japan , climbed 1.66%, more than reversing the drop from Thursday. For the week, it has reversed earlier losses to be largely flat.

The U.S. dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell as markets gave up bets on an emergency rate cut from the Fed. It fell 0.2% at 103.07, with the euro up 0.05% at $1.0923.

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