Asia up, Europe lower after US rate hike
Shanghai, Hong Kong and Wall Street futures advanced; London and Frankfurt declined; Japanese mkt closed for a holiday
Traders expect a US recession this year as the Fed and other central banks in Europe and Asia try to extinguish inflation that was near multi-decade highs. Jitters increased after three high-profile bank failures in the United States and one in Switzerland blamed on strain from higher interest rates. Central banks have tried to reassure investors by pledging steps including additional lending if needed
Asian stocks rose Thursday while European markets opened lower after the Federal Reserve raised its benchmark lending rate again to cool inflation and said it wasn't sure what may come next.Shanghai, Hong Kong and Wall Street futures advanced. London and Frankfurt declined. Japanese markets were closed for a holiday. Wall Street's benchmark S&P 500 index fell 0.7 per cent on Wednesday after the Fed announced a 0.25 percentage point increase in its lending rate. The Fed dropped a reference to “additional policy firming” in its statement but stopped short of declaring an end to rate hikes. “The key takeaway, in my view, is that we are likely at or very near the end of the rate hike cycle,” Kristina Hooper of Invesco said in a report.
In early trading, the FTSE 100 in London lost 0.2 per cent to 7,773.89. Frankfurt's DAX shed 0.2 per cent to 15,783.66 and the CAC 40 in Paris retreated 0.2 per cent to 7,389.89. On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were up 0.1 per cent. On Wednesday, the Dow fell 0.8 per cent and the Nasdaq composite slipped 0.5 per cent. In Asia, the Shanghai Composite Index rose 0.8 per cent to 3,350.45 as trading resumed following a holiday. The Hang Seng in Hong Kong surged 1.4 per cent to 19,969.40. The Kospi in Seoul lost less than 0.1 per cent to 2,500.94 and Sydney's S&P-ASX 200 fell less than 0.1 per cent to 7,193.10. India's Sensex gained 0.5 per cent to 61,500.18. New Zealand and Southeast Asian markets advanced.
Traders expect a US recession this year as the Fed and other central banks in Europe and Asia try to extinguish inflation that was near multi-decade highs. Jitters increased after three high-profile bank failures in the United States and one in Switzerland blamed on strain from higher interest rates.
