Stock markets traded mixed on Friday, as fresh COVID lockdown fears in China offset hopes that the Federal Reserve would tone down US interest-rate hikes.

With Wall Street closed for the Thanksgiving break, trading was light, with few catalysts to drive action on trading floors and investors looking ahead to the release of US jobs data next week.

Europe's major stock markets rose nearing the half-way mark after Asian indices closed mixed.

The euro was also mixed against main rivals, as official data showed Germany's economy grew more than previously thought in the third quarter despite high inflation and an energy crisis.

Oil prices firmed after heavy losses earlier in the week.

The mood across markets has picked up this month as a series of indicators suggested the US economy, the world's largest, was showing signs of weakness after the Fed ramped up interest rates.

The standout reports were consumer and wholesale inflation, which came in much lower than forecast and provided the US central bank with room to row back on its hawkishness.

And while a selection of Fed officials lined up to warn there was more tightening to come, there is an expectation that the days of bumper 75 basis-point increases are gone.

That has slightly eased worries that the sharp rise in borrowing costs could tip the US economy into recession, though many observers still see a contraction coming.

SPI Asset Management's Stephen Innes said there was a "market consensus bias to believe that US headline inflation will continue to ease substantially over the next month or two and that the tail risks around (more than five per cent interest rates) have dropped sharply".

There was a "market consensus bias to believe that US headline inflation will continue to ease substantially over the next month or two and that the tail risks around (more than 5% interest rates) have dropped sharply- SPI Asset Management's Stephen Innes

"After all, a step down to 50 basis points in December would be an unambiguous signal that peak hawkishness has passed."

Focus was also on fears about the spike in COVID cases in China, which authorities are trying to contain with a series of targeted measures in big cities including Beijing and Shanghai, though they are short of full-on lockdowns.

Still, Innes said there appeared to be less concern about the government's reaction as it looks to ease parts of its strict COVID-zero strategy.

"Stock and currency market investors are tentatively looking through the current lockdown regime while betting on the more optimistic interpretation that China is hitting the limits of 'COVID-zero' and the authorities' efforts to loosen restrictions will continue," he added.