London (AFP) – Europe’s stock markets rose Wednesday following a record-breaking Wall Street performance after US Federal Reserve chief Jerome Powell hinted at interest-rate cuts later this year.
London, Frankfurt and Paris also rebounded from recent losses sparked by French post-election uncertainty.
Traders shrugged off a mixed Asian showing and awaited further comments from Powell.
The dollar traded mixed.
Although his semi-annual Senate testimony on Tuesday did not indicate when Fed interest-rate cuts may come, analysts are predicting the first in September and a second before year’s end.
“Powell placed emphasis on needing ‘greater confidence’ that inflation was moving back towards target but also acknowledged the risk of leaving interest rates high for too long, pointing to cooling labour market conditions and the risk of unduly weakening economic activity,” noted Lindsay James, investment strategist at Quilter Investors.
“The Fed’s preferred measure of inflation, core PCE inflation, now providing a more reassuring message, together with the signs of a cooling economy, (means) that investors’ expectations of two rate cuts…are reasonable” by the end of the year.
James stressed however that the US central bank would refrain from any move in rates in November, in order to show impartiality close to a US presidential election.
Powell is set to testify before a House committee later Wednesday, and investors will also be eyeing US consumer inflation data due Thursday for further insight that price rises are still easing as hoped.
“Thursday’s CPI data could be crucial in determining whether the probability of a September rate cut increases further from the current 70 percent,” said SPI Asset Management’s Stephen Innes.
In Asia on Wednesday, Hong Kong stocks finished in the red after earlier rising more than one percent.
Shanghai closed lower, and Sydney, Mumbai and Manila were also down.
But Tokyo stocks advanced with the benchmark Nikkei 225 reaching an all-time high.
Seoul was flat, while Taipei, Wellington, Bangkok, Singapore, Jakarta and Kuala Lumpur all rose.
– Key figures around 1110 GMT –
London – FTSE 100: UP 0.6 percent at 8,188.46 points
Paris – CAC 40: UP 0.7 percent at 7,559.45
Frankfurt – DAX: UP 0.6 percent at 18,348.80
EURO STOXX 50: UP 0.6 percent at 4,934.44
Tokyo – Nikkei 225: UP 0.6 percent at 41,831.99 (close)
Hong Kong – Hang Seng Index: DOWN 0.3 percent at 17,471.67 (close)
Shanghai – Composite: DOWN 0.7 percent at 2,939.36 (close)
New York – Dow: DOWN 0.1 percent at 39,291.97 (close)
Euro/dollar: UP at $1.0822 from $1.0819 at 2040 GMT on Tuesday
Pound/dollar: UP at $1.2807 from $1.2790
Dollar/yen: UP at 161.47 yen from 161.29 yen
Euro/pound: DOWN at 84.51 pence from 84.56 pence
West Texas Intermediate: DOWN 0.1 percent at $81.30 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $84.46 per barrel
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© 2024 AFP
