London (AFP) – Global stock markets were sharply higher Thursday as several central banks indicated lower interest rates are on the way. The Federal Reserve said Wednesday it saw three cuts to US borrowing costs in 2024 after voting to hold interest rates at a 23-year high.
On Thursday, the central banks of England and Norway similarly held rates steady but suggested they could soon cut should inflation continue to ease. And the Swiss National Bank (SNB) on Thursday became the first major central bank to cut rates since the end of a global tightening cycle, claiming the battle against inflation was working.
“Investors overall reacted positively to the unexpected dovishness expressed by the Fed,” said David Morrison, analyst at Trade Nation. “Market expectations, as illustrated by the CME’s FedWatch Tool, show an increased probability of a 25 basis point rate cut at the June meeting.”
All the main Wall Street rose at the opening Thursday after hitting record highs late Wednesday after the Fed’s announcements. Frankfurt and Paris reached new all-time peaks before pulling back somewhat. Gold hit a fresh record of $2,220 an ounce as US rate cuts could weigh on the dollar. However, the dollar’s decline against the euro was limited by weak eurozone manufacturing data, which indicates the European Central Bank could match the Fed’s rate cuts. The SNB’s announcement sent the Swiss franc sliding to multi-month lows against the dollar and euro. Oil continued to slide on profit taking after earlier this week hitting a five-month high.
– Key figures around 1340 GMT –
New York – Dow: UP 0.6 percent at 39,728.38 points
New York – S&P 500: UP 0.6 percent at 5,254.52
New York – Nasdaq Composite: UP 0.9 percent at 16,523.60
London – FTSE 100: UP 1.7 percent at 7,869.74
Paris – CAC 40: UP 0.1 percent at 8,165.41
Frankfurt – DAX: UP 0.4 percent at 18,092.29
EURO STOXX 50: UP 0.7 percent at 5,036.65
Tokyo – Nikkei 225: UP 2.0 percent at 40,815.66 (close)
Hong Kong – Hang Seng Index: UP 1.9 percent at 16,863.10 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,077.11 (close)
Euro/dollar: DOWN at $1.0899 from $1.0923 on Wednesday
Dollar/yen: DOWN at 151.31 yen from 151.36 yen
Pound/dollar: DOWN at $1.2713 from $1.2782
Euro/pound: UP at 85.70 pence from 85.44 pence
West Texas Intermediate: DOWN 0.3 percent at $81.00 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $85.77 per barrel
© 2024 AFP
