Global equities, Wall St higher after Powell says rates will rise
Global equities and Wall Street futures rose on Wednesday after Federal Reserve Chairman Jerome Powell said U.S. monetary policy would return to normal and interest rates could be raised earlier than foreseen.
London and Frankfurt opened up. Shanghai, Tokyo and Sydney have moved forward.
Wall Street’s benchmark S&P 500 rose 0.9% on Tuesday after Powell said politics “in all likelihood” would return to normal as bond purchases and other stimulus measures were taken. slow down. Speaking to the Senate Banking Committee, he said ultra-low rates could be raised earlier than expected if necessary to slow inflation which is at its highest level in four decades.
“Wall Street now has a better understanding of how the Fed is going to normalize its policy,” Oanda’s Edward Moya said in a report. “After Powell’s testimony some investors believe they have received the clear signal to buy the downside.”
Early in trading, the London FTSE 100 rose 0.5% to 7,529.16. The Frankfurt DAX rose 1.1% to 15,941.81. The CAC 40 in Paris gained 1% to 7,183.38.
On Wall Street, futures on the benchmark S&P 500 and the Dow Jones Industrial Average rose 0.2%.
On Tuesday, the S&P 500 broke a series of five-day declines and rose 0.9%. The Dow Jones gained 0.5% and the Nasdaq composite advanced 1.4%.
In Asia, the Shanghai Composite Index gained 0.8% to 3,595.12 and the Nikkei 225 in Tokyo rose 1.9% to 28,765.66. Hong Kong’s Hang Seng gained 2.6% to 24,354.68.
The Kospi in Seoul rose 1.5% to 2,972.48 and the S & P-ASX 200 in Sydney rose 0.7% to 7,438.90.
Indian Sensex opened 0.8% at 61,102.89. New Zealand declined while Southeast Asian markets advanced.
Investors were shaken in mid-December when Fed officials announced they would speed up plans to remove stimulus measures that are pushing stock prices up. They tried to figure out how the world’s largest economy and financial markets would react.
Also on Tuesday, the World Bank cut its forecast for global economic growth this year to 4.1% from 4.3% in part due to supply chain disruptions that fueled inflation. The agency estimates that the global economy grew 5.5% in 2021.
On Wednesday, the US government is due to report consumer inflation. This is followed Thursday by a wholesale price index.
In energy markets, benchmark US crude rose 2 cents to $ 81.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose from $ 2.99 on Tuesday to $ 81.22. Brent crude, used as the price base for international oils, fell 11 cents to $ 83.61 a barrel in London. He earned $ 2.85 the previous session to $ 83.72.
The dollar edged down to 115.34 yen from 115.37 yen on Tuesday. The euro edged down to $ 1.1364 from $ 1.1366.