New York (AFP) – Global equities mostly rose Thursday as the ECB and Britain pressed pause on rates after the Fed had sent Wall Street soaring on a pivot toward interest rate cuts next year.
After a torrid series of rate hikes over the past two years to tether runaway inflation, the Bank of England joined the European Central Bank and the Federal Reserve in pausing on interest rates for the second straight meeting.
The Fed’s suggestion of monetary easing starting next year sparked a major post-meeting rally Wednesday — though trading on Thursday was more volatile.
All three major US indices finished higher following a midday swoon, with the Dow ending at a fresh all-time record.
“It appears, at least for now, that the Fed has won its fight against inflation and the market is cheering that victory,” said Adam Sarhan of 50 Park Investments.
Frankfurt’s DAX index and the Paris CAC 40 vaulted to all-time highs before retreating, with the German index ending the day just into the red while Paris added 0.6 percent after the European Central Bank, while holding fire on rates as expected, cautioned the inflation battle is not yet won.
ECB president Christine Lagarde warned that policymakers should not “lower our guard” in fighting inflation, dousing market hopes of early drops in interest rates next year.
She added rate cuts had not been discussed because of concern inflation could pick up again in the near term, while the ECB also cut its growth forecasts for this year and next.
London meanwhile ended 1.3 percent higher after the BoE decided to keep its key rate at a 15-year pinnacle of 5.25 percent as UK inflation declines yet remains elevated, indicating monetary policy will likely need to be restrictive for an extended period.
Amid such caveats, “there were no (market) fireworks,” noted Craig Erlam, senior market analyst with Oanda, whose over-all conclusion was the central banks “didn’t give investors much to get excited about.”
The greenback retreated against the euro and pound, while oil prices spiked almost four percent to rebound from recent six-month lows.
In Asia, the upbeat mood lifted Hong Kong, Sydney and Seoul.But Shanghai dipped on Chinese economic worries and Tokyo dropped on the stronger yen.
– Key figures around 2130 GMT –
New York – Dow: UP 0.4 percent at 37,248.35 (close)
New York – S&P 500: UP 0.3 percent at 4,719.55 (close)
New York – Nasdaq: UP 0.2 percent at 14,761.56 (close)
London – FTSE 100: UP 1.3 percent at 7,648.98 (close)
Paris – CAC 40: UP 0.6 percent at 7,575.85 (close)
Frankfurt – DAX: DOWN 0.1 percent at 16,752.23 (close)
EURO STOXX 50: UP 0.2 percent at 4,539.16 (close)
Tokyo – Nikkei 225: DOWN 0.7 percent at 32,68 (close)
Hong Kong – Hang Seng Index: UP 1.1 percent at 16,402.19 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,958.99 (close)
Euro/dollar: UP at $1.0996 from $1.0874 on Wednesday
Dollar/yen: DOWN at 141.87 yen from 142.89 yen
Pound/dollar: UP at $1.2764 from $1.2618
Euro/pound: DOWN at 86.12 pence from 86.18 pence
West Texas Intermediate: UP 3.0 percent at $71.58 per barrel
Brent North Sea crude: UP 3.2 percent at $76.61 per barrel
