Wall Street stocks attempted to stage a relief rally and Hong Kong soared on Thursday, but elsewhere equity trading was still dominated by recession fears.

Oil prices, meanwhile, rebounded slightly from recent sharp losses.

Equity markets had been rising ahead of US jobs figures last week, boosted by a surprise drop in inflation and comments from Federal Reserve boss Jerome Powell that the bank was likely to raise rates at a slower pace.

But robust jobs figures and a jump in wages, plus data on Monday showing a forecast-busting jump in activity in the US services sector last month, raised the prospect that the Fed will not back down from sharp rate increases when it meets next week.

Following several days of losses, Wall Street opened to the upside, with the Dow rising 0.4 percent.

"What we have today, then, is a little rebound spirit -- an assumption that the stock market is due for a bounce after behaving so poorly in more recent action..." said market analyst Patrick O'Hare at Briefing.com.

European stocks tried to rally before Wall Street opened, but failed to hold onto gains. London was flat, while both Frankfurt and Paris were down 0.2 percent as trading got underway in New York.

"The risk-off sentiment... remains hard to kick into touch as concerns about recession stay front and centre," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"The evil twins of recession and persistently higher inflation are lurking, keeping investors on edge."

Analysts pointed out that two-year US Treasury yields were much higher than those of 10-year bonds, which is usually considered a clear indication of a looming recession.

This week also saw the heads of some of Wall Street's biggest banks warn of a downturn.

- China Covid shift -
 

The fear of a US recession is playing off against China's shift away from its zero-Covid strategy of lockdowns and mass testing that has been blamed for clattering the world's number two economy.

After widespread protests last month against the strict measures and calls for more political freedoms, authorities have scaled back many of them and on Wednesday announced a nationwide loosening of restrictions.

While there are worries that the more liberal approach will spark a surge in infections, it has helped fan a rally in Hong Kong where Chinese tech firms and property developers are listed.

The Hang Seng Index closed up more than three percent Thursday.

"Developments in China have a big role to play, although as we're seeing once again, Covid-related moves are almost exclusively impacting stocks in domestic markets," said Craig Erlam, senior analyst at OANDA trading group.

"We can see that again overnight, with reports of looser mask and isolation requirements in Hong Kong lifting the Hang Seng and making it the clear outperformer in the region, while most other indices tread water."

- Key figures around 1430 GMT -
 

New York - Dow: UP 0.4 percent at 33,715.24 points

London - FTSE 100: FLAT at 7,487.53

Frankfurt - DAX: DOWN 0.2 percent at 14,231.57

Paris - CAC 40: DOWN 0.2 percent at 6,646.81

EURO STOXX 50: DOWN 0.2 percent at 3,913.49

Tokyo - Nikkei 225: DOWN 0.4 percent at 27,574.43 (close)

Hong Kong - Hang Seng Index: UP 3.4 percent at 19,450.23 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,197.35 (close)

Euro/dollar: UP at $1.0531 from $1.0510 on Wednesday

Dollar/yen: UP at 136.62 yen from 136.57 yen

Pound/dollar: UP at $1.2212 from $1.2209

Euro/pound: UP at 86.21 pence from 86.05 pence

Brent North Sea crude: UP 1.6 percent at $78.40 per barrel

West Texas Intermediate: UP 2.8 percent at $74.04 per barrel