Stock indices fell, for the second day in a row, following the decisions of the central banks, all of which were extremely cautious despite the slowdown in inflation.
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Stock indices fall on the impact of central bank decisions
The global stock exchanges, especially the European ones, reacted negatively today, Thursday, to the decisions of European central banks, and all of them were very cautious, despite the slowdown in inflation.
European stock exchanges declined more compared to the previous day, as the Paris Stock Exchange fell by 2.39%, the Frankfurt Stock Exchange by 2.26%, the Milan Stock Exchange by 2.31%, and the London Stock Exchange decreased by -0.85 percent, until 14:10 GMT. .
On Wall Street, the futures contracts for the main US indices showed a decline between 1.1% and 1.5%, following closing lower as well.
The European Central Bank did not deviate from it Directions of the US Federal Reserve And the Bank of England and the central banks of Switzerland and Norway, as it continued to increase the main interest rate, but less sharply than in previous months.
And the US Federal Reserve announced, on Wednesday, that it would raise interest rates by 50 basis points, and this is the first time that the rate of increase has decreased during the current year in light of efforts to combat inflation.
Also read: The head of the US Central Bank in New York is likely to continue tightening monetary policy
Last month, the Federal Reserve raised the interest rate for the sixth time, and for the fourth time in a row, by the same amount, which is 75 basis points.
Those increases were preceded by one by 25 basis points, and another by 50 points in March and May.
In the wake of that increase, the interest rate ranged between 4.25 and 4.50, the highest since 2007.
Monetary policy developments are an additional source of concern for investors, who fear that higher interest rates will push the global economy into recession.
The Empire State index of manufacturing activity in the New York region, in the northeastern United States, declined in December, following rebounding in November, while companies are preparing for an economic slowdown next year without excluding a recession.
Equity markets in Asia were also hit, following retail sales in China fell more sharply than expected in November, coming in at 5.9% over the year.
Also read: Biden: We inherited high inflation and are working to reduce it
Lower household consumption in China in November weighed on luxury stocks.
Oil declined slightly following its strong gains since the beginning of the week, as the price of a barrel of US West Texas Intermediate crude oil decreased by 0.44% to $76.96, and the price of a barrel of Brent North Sea crude declined by 0.47% to $82.31, at $82.31. The time is 14:00 GMT.
