2023-06-22 14:09:42
(Photo: Getty Images)
MARKET REVIEWS. Global stock markets maintained their downtrend on Thursday, as they had since the start of the week, surprised by announcements from several central banks and unenthusiastic regarding the US central bank raising interest rates further.
Stock indices
Global markets were down Thursday morning, the day following a tough session on Wall Street following the chairman of the US Federal Reserve indicated he believed inflation was still out of control.
Paris fell 1.2% at the start of the session in Europe. Frankfurt slipped 0.7% and London of 0.8%.
In New York, before the markets open, the average Dow Jones of industrial stocks fell by 0.1% and the broader index S&P 500 of 0.2%.
In Asia, the Nikkei 225 fell 0.9% in Tokyo. Sydney plunged 1.6% and Seoul took 0.4%. The scholarships of Shanghai et Hong Kong were closed for the Dragon Boat Festival, a national holiday.
On the New York Commodity Exchange, the price of oil dropped 42 cents US to US$72.06 a barrel.
The context
Wall Street indices are heading for a lower open. On Wednesday, they retreated following US Federal Reserve Chairman Jerome Powell warned Congress that a – albeit slower – rate hike was still in the cards.
On Thursday, investors were surprised by announcements from the Bank of England (BoE), the Bank of Norway and the Turkish Central Bank.
The first two announced rate hikes of 0.50 percentage points, while analysts had expected a smaller rise.
“Recent data shows that inflation is more persistent than expected, with a tight labor market and resilient demand,” said the BoE’s Monetary Policy Committee (MPC) in a statement.
In May, UK inflation held steady at 8.7% year-on-year as analysts expected a slowdown.
The BoE faces both “the destructive impact of persistently high inflation”, as well as “charges of appeasement that caused the current situation” and “growing dissatisfaction with the contraction effect that higher rates will have on the economy,” said Ricardo Evangelista, analyst at ActivTrades.
The livre sterling did not react too much and took 0.19% once morest the dollar at 1.2794 $US for one pound.
The norwegian krone took more than 1% once morest other major currencies and was worth US$0.0948 for one crown.
Yields on British debt rose only slightly, but had seen a sharp rise on Wednesday.
The two-year bond rate, the most sensitive to monetary policy expectations, stood at 5.05%, close to its peak reached the day before at 5.11%, a level not seen since 2008.
“Rightly or wrongly, the BoE’s difficulties in channeling price increases are rekindling concerns of a similar situation for the European Central Bank and the Federal Reserve,” according to analysts at Natixis CIB Research.
As for the Turkish central bank, it raised its key rate from 8.5% to 15%, a major political reversal, abandoning for the first time in two years the unconventional economic measures promoted by Turkish President Recep Tayyip Erdogan.
The turkish lira fell 2.89% once morest the dollar and fell to a new all-time low, one US dollar was worth 24.27 pounds.
The Swiss National Bank for its part raised its key rate by 0.25 percentage point to 1.75%, as expected.
ocado emballé
The British shopping delivery platform Ocado surged more than 36% in London, following a Times article reporting rumors of potential takeover bids from US tech giants like Amazon.
On the side of oil and bitcoin
Oil prices dipped on Thursday as China’s recovery hopes were dampened by less than expected support measures, and high key rates from major central banks rekindled fears regarding the global economy.
The barrel of North Sea Brent lost 2.02% to US$75.56 and its US equivalent, a barrel of West Texas Intermediate (WTI)for same month delivery, was down 2.15% to US$70.96.
The bitcoin was fairly stable (+0.19%) at US$30,045, following climbing the day before with renewed investor interest in cryptoassets.
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