European shares struggle for direction after Wall Street rally overnight

European stocks were silenced on Wednesday as the jump to global stock markets failed to move to second trading.

The regional Stoxx 600 stock index traded unchanged, while the London FTSE 100 index was stable. The Hong Kong Hong Kong Index was down 0.2%, while Tokyo’s Nikkei 225 closed up 0.9%.

The U.S. S&P 500 index rose 2% on Tuesday in a rebound shortly after the worst-week weekly loss streak for global equities since 2008. The gains followed. Stronger than expected Retail sales data, which indicated that consumers are still spending despite rising inflation.

Analysts have warned that this is a bear market rise, with declining stock market trends reversing in short bursts of relief as investors remain nervous about rising interest rates making up the global economy. Said.

“The relief had to fade and today we are seeing the peak of the bear market rise,” said Marco Wilner, head of investment strategy at NN Investment Partners. “We just feel cautious, and while buying opportunities will come down the road, we are not there yet.”

S&P, a leader in other global stock markets, last week overtook a bear market, which was defined as a 20% drop from the recent high. The FTSE All World index of emerging and emerging market stocks also traded about 15% below its level at the beginning of the year.

The gloomy mood in the markets was built when large central banks, which pinned lending costs close to zero and bought government bonds at unprecedented rates at the start of the corona plague, began to reverse their supportive policies.

On Tuesday, U.S. Federal Reserve Chairman Jay Powell said The most influential interest rate setter in the world will continue to raise credit costs until it sees “clear and convincing” evidence that U.S. inflation, which is above 8 percent, is moderating.

The Fed raised interest rates by 0.75 percentage points since March and marked further half-point gains in the next two monetary policy meetings. It will also start reducing its balance sheet, which swelled to $ 9 billion after launching unlimited purchases of mortgage-backed bonds and bonds in March 2020, from next month.

After the financial markets benefited from “huge liquidity support” from central banks, “the buyer of last resort comes out the door,” said Neil Burrell, chief investment officer at Premier Miton Investors.

“The market sentiment is really volatile and we are getting days of relief,” he added. “But I do not feel there is real momentum behind any of these demonstrations.”

Futures trading hinted that the S&P would fall 0.2 percent in early New York deals, and the technology-focused Nasdaq 100 would fall 0.4 percent.

In currencies, sterling fell 0.5% against the dollar to $ 1.24 after showing data Inflation in the UK Reached a four-decade high of 9% in April, which raised concerns about the weakness of the economy. Guilds rose in price as the yield on 10-year government securities fell by 0.04 percentage points to 1.84%.

The yield on the 10-year Treasury bill, which bases global debt pricing, was stable at 2.97%. Germany’s corresponding bond yield added 0.01 percentage point to 1.06 percent.

Brent crude, the oil index, rose 1 percent to $ 113 a barrel.

European shares struggle for direction after Wall Street rally overnight Source link European shares struggle for direction after Wall Street rally overnight

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