London (AFP) – Stock markets moved sideways while the dollar edged higher against main rivals Wednesday with the US Federal Reserve expected to cut interest rates. Shares in Nissan soared more than 20 percent on reports that the Japanese car titan is in merger talks with rival Honda.
The Fed is widely expected to cut borrowing costs for a third time in a row when it concludes its gathering Wednesday, trimming them by 25 basis points, leaving traders to focus on its statement for clues over the outlook. “The most important thing from the Fed’s meeting will be comments on monetary policy in 2025 as the market is starting to fret about future rate cuts being less frequent,” noted Russ Mould, investment director at AJ Bell.
With US inflation coming down, decision-makers have been able to loosen their grip on policy since September. However, with Donald Trump set to re-enter the White House next month — pledging tax cuts, deregulation, and tariffs on imports from China — there are fears prices could reignite, forcing the Fed to re-evaluate its rates timetable. Briefing.com analyst Patrick O’Hare said the market was bracing for Fed chair Jerome Powell to indicate it was unlikely to cut rates again in January.
“The questions are, just how long might any pause last and how might that translate in terms of total rate cuts in 2025,” he said. The Fed is also set to release its latest Summary of Economic Projections, and O’Hare noted that the previous version had suggested rates might come down by 100 basis points in 2025.
Across the Atlantic, official data Wednesday showed UK inflation had picked up in November, firming expectations that the Bank of England will hold off cutting its key interest rate on Thursday. With annual inflation rising as expected to 2.6 percent, the pound also steadied. Traders were also waiting for the conclusion of the Bank of Japan’s policy meeting Thursday.
Chinese stock markets and oil prices gained on hopes of more stimulus to boost China’s flagging economy. In the car sector, Nissan shares soared, while Honda fell about three percent. Mitsubishi Motors — whose top stakeholder is Nissan — accelerated almost 20 percent.
Elsewhere on the corporate front, UniCredit, Italy’s second-largest bank, increased its stake in Germany’s Commerzbank to around 28 percent amid growing speculation of an attempted buyout. UniCredit’s shares rose by 1.4 percent in afternoon trading, while those in Commerzbank climbed 2.3 percent.
– Key figures around 1430 GMT –
New York – Dow: FLAT at 43,465.28 points
New York – S&P 500: FLAT at 6,048.06
New York – Nasdaq Composite: UP less than 0.1 percent at 20,124.11
London – FTSE 100: UP less than 0.1 percent at 8,201.17
Paris – CAC 40: UP less than 0.1 percent at 7,370.91
Frankfurt – DAX: FLAT at 20,252.26
Tokyo – Nikkei 225: DOWN 0.7 percent at 39,081.71 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 19,864.55 (close)
Shanghai – Composite: UP 0.6 percent at 3,382.21 (close)
Euro/dollar: DOWN at $1.0490 at $1.0498
Pound/dollar: DOWN at $1.2695 from $1.2707
Dollar/yen: UP at 153.83 yen from 153.41 yen
Euro/pound: UP at 82.62 pence from 82.52 pence
Brent North Sea Crude: UP 0.6 percent at $73.59 per barrel
West Texas Intermediate: UP 0.7 percent at $70.59 per barrel
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© 2024 AFP
