London: Most of the world’s stock markets pushed higher and the dollar rose Thursday as investors basked in the Fed’s sunny assessment of the US economy and the possibility of another rate hike just in time for the holidays.
The US central bank on Wednesday hiked interest rates for the third time this year, as expected, citing an increasingly strong economy and jobs market, with Fed governor Jerome Powell saying he saw no vulnerabilities in the financial system.
Powell also said there remained risks from trade tensions, which could lift inflation, but added it was too soon to tell what impact it would have.
While Wall Street stocks ended the day down on Wednesday, they pushed higher on Thursday. The Dow was 0.5 higher approaching midday.
Market analyst David Madden at CMC Markets UK said that although the rate hike was expected, the Fed’s “statement was on the hawkish side, and traders are pricing in a high possibility of a rate hike in December.”
Meanwhile Joshua Mahony at IG added “the fact that we are looking for another four hikes by the end of 2019 provides plenty of reasoning to keep buying the dollar.”
The rise in the dollar helped perk up European stocks as the slide in the value of the euro and pound helps exporters, thus perking up share prices.
The odd man out was Milan’s FTSE MIB index, which slid 0.6 percent.
percent as Italy’s populist government was set to unveil the outlines of its first budget, as fears deepen that it could breach EU fiscal rules and worsen the country’s already mammoth debt burden.
On oil markets meanwhile, both main contracts have jumped since US energy secretary Rick Perry pushed back against speculation the government could tap its emergency stockpiles in order to lower prices.
Crude is at around four-year highs after OPEC and other key producers decided against lifting output, despite being urged to do so by Trump.
Traders remain concerned their won’t be enough oil supplies on the market when the US implements sanctions on Iran in November.
In company action, shares in German industrial conglomerate Thyssenkrupp shot up 17 percent after its board decided to split the historic group into two listed companies.
Shareholders have demanded splitting up the massive conglomerate, whose businesses range from building elevators, submarines and car parts to steelmaking. Such a reorganisation could help unlock value for investors.
Thyssenkrupp shares ended the day with a 9.9 percent gain.
– Key figures around 1530 GMT –
New York – Dow Jones: UP 0.5 percent at 26,502.51 points
London – FTSE 100: UP 0.5 percent at 7,545.44 (close)
Frankfurt – DAX 30: UP 0.4 percent at 12,435.59 (close)
Paris – CAC 40: UP 0.5 percent at 5,540.41 (close)
Milan – FTSE MIB: DOWN 0.6 percent at 21,511 (close)
EURO STOXX 50: UP 0.5 percent at 3,449.15
Tokyo – Nikkei 225: DOWN 1.0 percent at 23,796.74 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 27,715.67 (close)
Shanghai – Composite: DOWN 0.5 percent at 2,791.77 (close)
Euro/dollar: DOWN at $1.1671 from $1.1743 at 2100 GMT
Pound/dollar: DOWN at $1.3105 from $1.3169
Dollar/yen: UP at 113.06 yen from 112.74 yen
Oil – Brent Crude: UP 13 cents at $81.47 per barrel
Oil – West Texas Intermediate: UP 35 cents at $71.92