Stock Markets Push Higher after Fed Hike, Trump's China Comments
Most of the world's stock markets pushed higher and the dollar rose Thursday as investors weighed the prospect of more U.S. interest rate hikes and U.S. President Donald Trump's latest broadside in his trade war with China.
The U.S. 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, but pushed higher at the opening bell on Thursday.
Most European exchanges also pushed higher in the afternoon, after having earlier been in the red.
"European equities are mixed in afternoon action, with the euro and British pound losing ground versus the U.S. dollar, which is finding some support while the global markets scrutinize yesterday's monetary policy decision out of the U.S. yesterday that delivered a highly-expected third rate increase of the year," said analysts at Charles Schwab brokerage.
A drop in the value in their currency helps exporters from the eurozone and Britain, so often helps stock prices rise.
Elsewhere, Trump has ramped up his criticism of China, accusing it of trying to sway November's mid-term elections against his Republican party because of the trade row and admitting his relationship with President Xi Jinping may have been permanently damaged.
His comments will do little to ease concerns about an all-out trade war between the two economic giants, which have exchanged tariffs on hundreds of billions of dollars worth of goods, with no sign of a let-up in hostilities.
However, investors also took in stride the World Trade Organization downgrading its global trade forecast for this year and next, pointing to escalating trade tensions around the world.
On oil markets meanwhile, both main contracts have jumped since U.S. 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.
Meanwhile, Milan's FTSE MIB index slumped 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.
In Asia, Tokyo ended down one percent, following on from losses Wednesday on Wall Street.
- Key figures around 1330 GMT -
New York - Dow Jones: UP 0.2 percent at 26,426.16
London - FTSE 100: UP 0.3 percent at 7,532.68 points
Frankfurt - DAX 30: UP 0.2 percent at 12,409.53
Paris - CAC 40: UP 0.2 percent at 5,524.21
Milan - FTSE MIB: DOWN 0.8 percent at 21,437.80
EURO STOXX 50: UP 0.2 percent at 3,439.10
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 $1.1678 from $1.1743 at 2100 GMT
Pound/dollar: DOWN at $1.3120 from $1.3169
Dollar/yen: UP at 113.04 yen from 112.74 yen
Oil - Brent Crude: UP 56 cents at $81.90 per barrel
Oil - West Texas Intermediate: UP 81 cents at $72.38
Source: Agence France Presse
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