London (AFP) – Stock markets rose and the dollar fell Wednesday on growing prospects of cuts to US interest rates after soft inflation data, with Japan’s Nikkei hitting a fresh record high. It followed fresh all-time pinnacles for Wall Street’s S&P 500 and Nasdaq indices Tuesday after US data showed a tamer-than-feared impact on prices from President Donald Trump’s tariff blitz. That boosted expectations that the US Federal Reserve and its embattled chief Jerome Powell will cut interest rates next month.
“European markets are following their Asian counterparts higher…with yesterday’s US core inflation uptick doing little to dampen spirits,” noted Joshua Mahony, chief market analyst at Rostro trading group. The US consumer price index reading for July showed annualised inflation at 2.7 percent, unchanged from a month earlier. Investors calculated that the benign data was not enough to sway the Fed away from an expected rate cut next month.
Katy Stoves, investment manager at Mattioli Woods, said however that “gentle cooling of the economy will certainly not justify a cut of interest rates to one percent” as demanded by Trump, who continued his criticism of the Fed boss. “Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump said on Truth Social.
Tokyo’s main stocks index climbed 1.3 percent to a record high Wednesday and Hong Kong jumped 2.6 percent by the close. Seoul, Shanghai, Taipei, Singapore, Kuala Lumpur, Bangkok and Jakarta also saw healthy gains. Europe followed suit, with London, Frankfurt and Paris all higher nearing the half-way stage. Oil prices fell on forecasts of abundant supplies.
Investor focus was also on a summit in Alaska on Friday between Trump and Russian leader Vladimir Putin on the three-year-old Ukraine war. In corporate news, AI firm Perplexity has offered Google $34.5 billion for its Chrome web browser, which it may have to sell as part of antitrust proceedings.
– Key figures at around 1100 GMT –
London – FTSE 100: UP 0.1 percent at 9,156.32 points
Paris – CAC 40: UP 0.5 percent at 7,789.18
Frankfurt – DAX: UP 0.8 percent at 24,215.98
Tokyo – Nikkei 225: UP 1.3 percent at 43,274.67 (close)
Hong Kong – Hang Seng Index: UP 2.6 percent at 25,613.67 (close)
Shanghai – Composite: UP 0.5 percent at 3,683.46 (close)
New York – Dow: UP 1.1 percent at 44,458.61 (close)
Euro/dollar: UP at $1.1718 from $1.1677 on Tuesday
Pound/dollar: UP at $1.3569 from $1.3501
Dollar/yen: DOWN at 147.42 yen from 147.77 yen
Euro/pound: DOWN at 86.35 pence from 86.45 pence
West Texas Intermediate: DOWN 0.8 percent at $62.67 per barrel
Brent North Sea Crude: DOWN 0.6 percent at $65.70 per barrel
© 2024 AFP
