European stocks and U.S. stock futures rose in response to hopes for peace talks between Russia and Ukraine and Chinese economic incentives, reassuring market nervousness ahead of the expected U.S. interest rate decision.
The Stoxx 600 regional stock index rose 2.8% by noon in London on Wednesday. Germany’s Xetra Dax added 3.3% while London’s FTSE 100 rose 1.4%.
Futures trading hinted that the S&P 500 stock index on Wall Street would open up 1.3%, while the technology-focused Nasdaq 100 would rise 1.8%.
Ukrainian President Volodymyr Zalansky said talks with Russia are becoming “More realistic“Following another night of heavy shelling.
Meanwhile, Liu Ha, China’s closest economic adviser to Xi Jinping, said on Wednesday that Beijing Would take measures “Boost the economy in the first quarter”, as well as introduce “positive market policies”.
Some investors now see the short-term rises in the stock market as fragile, dangerous because of the unpredictability of the war and central banks are tightening monetary policy to fight high inflation. The Stokes remained low at more than 8 percent a year while the Dax lost about a tenth.
“High volatility makes it difficult to trade in these markets,” said Jeremy Gatto, director of multi-asset funds at Unigestion.
Following its monetary policy meeting later Wednesday, the US Federal Reserve is expected to raise interest rates for the bank For the first time since 2018 And signals a path towards further increases this year. The annual rate of U.S. consumer price inflation reached a new 40-year high of 7.9 percent in February.
“We may be in a situation later this afternoon where we will receive negative news about Ukraine-Russia or the Fed may be more hawkish. [about future rate rises] Than expected, “Gato warned.” It is better to remain neutral. ”
China’s economy continues to be affected by the country’s zero corona policy, which has led to widespread social restrictions and trade disruptions. Shanghai and Shenzhen, two major trading centers, are in partial closure while Chinese businesses face them Western sanctions against Russia Rising prices of energy, metals and agricultural commodities.
In Asia, the Hong Kong Hong Kong Index closed up 9.1% as markets across the Asia-Pacific region rose. The CSI 300 index of China shares rose 4.3% and the Nikkei 225 in Tokyo added 1.6%.
Bank of America strategists said they expect the Fed to raise its principal funds interest by a quarter of a point at a meeting, signaling they are willing to go further.
“I think the market is clearly discounted [0.25 percentage points]Said Caspar Rock, Chief Investment Officer at Cazenove Capital.
“If they do something else it will be a surprise” which may prove disruptive, he added. Investors will also focus on what is known as the points plot of Fed executives’ personal interest rate forecasts and “Chairman Jay Powell’s comment on the rate of further interest rate hikes,” Rock said.
The 10-year Treasury yield, which reverses the price of U.S. securities and is based on global fundraising costs, has been broadly stable at 2.17%, close to a peak since May 2019.
The 10-year yield on the German Bund, a barometer of recruitment costs in the eurozone, rose by 0.06 percentage points to 0.39%, close to the highest level since November 2018.
The dollar, which tends to fall when positive sentiment in the market reduces demand for reserve currency, fell 0.5%.
Global stock markets rise on signs of talks progress and Beijing stimulus Source link Global stock markets rise on signs of talks progress and Beijing stimulus