In Sydney trading, mining and energy stocks participated in the rally for the second day. Third largest oil producer Santos jumped 2%, followed by 1.6% rise in Rio Tinto and 0.3% lift in BHP. Alliance Resources jumped 16% on the news that the company has found uranium deposits in South Australia State.

In Shanghai and Hong Kong stocks advanced. In Shanghai stocks gained 0.5% and for the week soared 6.8%. China Construction Bank jumped 3.2% on the news that company plans to raise $5.5 billion in Shanghai. Bank of China rose 1.3%. Bank of China shareholders authorized company to issue 3 billion yuan ($390 million) bond, first Chinese currency debt in Hong Kong.


[R]9:45AM U.S. stocks rallied at opening, boosted by strong inflation data.[/R]

Wall Street opened higher Friday, with the three major averages accelerating quickly to climb 1% soon after the market opening. The rally was fueled by the release of some relatively tame inflation data.

Consumer prices rose 0.7%, their fastest pace since September of 2005, while core consumer prices showed a much more modest increase of 0.1%, coming in below analyst estimates. Intel (INTC: chart) also gave a boost, rising 3.4%after Goldman Sachs upgraded its stock to buy from neutral.

In other corporate news, Monsanto Co.(MON: chart) jumped 6% after the world's largest seed company lifted its full-year earnings forecast. Gun maker Smith & Wesson Holding Corp. rose 6% after reporting stronger-than-expected Q4 profit and sales. The company also raised its full-year profit and sales forecasts.

In early trading, the Dow jumped 98.12, or 0.72%, to 13,651.84. The Standard & Poor's 500 index rose 11.74, or 0.77%, to 1,534.71. The Nasdaq composite index rose 24.88, or 0.96% to 2,624.29. The yield on the benchmark 10-year Treasury note fell to 5.20% Friday from 5.23% late Thursday after release of the CPI report helped ease rate concerns.

[R]CPI rose 0.7% in May, exceeding expectations of 0.6% increase.[/R]
Friday morning, the Department of Labor released its highly anticipated report on consumer prices in the month of May. While the report showed that prices rose a little more than expected, core prices rose less than expected. The Labor Department said its consumer price index rose 0.7 percent in May following a 0.4 percent increase in the previous month. Economists had been expecting a slightly more modest increase of about 0.6 percent. The bigger than expected increase marked the fastest pace of consumer price growth since September of 2005, when the impact of Hurricane Katrina drove gasoline prices higher and resulted in a 1.2 percent increase in consumer prices.

A sharp rise in energy prices also contributed to the bigger than expected increase in prices in May, with energy prices surging up 5.4 percent after rising 2.4 percent in April. The increase in energy prices was due in large part to a 10.5 percent increase in gasoline prices. The increase in energy prices also contributed to a significant increase in transportation prices, which rose 2.8 percent in May following a 1.2 percent increase in April. As mentioned above, however, the report also showed that the core consumer price index, which excludes food and energy prices, edged up only 0.1 percent after rising 0.2 percent in April. Economists had expected the core index to increase by 0.2 percent.


[R]9:30AM FTSE 100 advances Friday on takeover speculation around J Sainsbury.[/R]

The FTSE 100 Index advanced 39.5, or 0.6%, to 6689.4 in London at noon.

Advancers

Sainsbury climbed 5.2%. Delta Ltd., a Qatar-backed investment fund, raised its stake in the company to 25 % after acquiring an additional 7.1% of the stock.

William Morrison, the fourth-biggest U.K. food retailer, rose 2.4%. Tesco Plc, the country largest retailer, jumped 1.3%.

Accident Exchange Group soared 22%, after the U.K. provider of rental cars secured a new loan.

D1 Oils gained 6.9%. The U.K.-based maker of biodiesel fuel said it noted the recent gain in the company share price and said talks were reaching an advanced stage regarding a strategic collaboration.

Legal & General Group climbed 1.9% after Cazenove raised its recommendation on the U.K. life insurer with $450 billion under management to outperform from in-line.

Lonmin gained 4.9%. Morgan Stanley raised its share-price estimate on the world largest platinum producer.