Wall Street resumed its decline, Thursday, to close lower as inflation reached its highest level in four decades, boosting expectations that the Federal Reserve will raise key interest rates at the conclusion of its monetary policy meetings next week to calm markets.
While all three major indices closed lower, they pared their losses late in the day and closed above session lows following the US stock market had its best day in months, Wednesday thanks to a multi-session quick sell-off.
The Dow Jones Industrial Average fell 112.18 points, or 0.34 percent, to 33,174.07 points. The Standard & Poor’s 500 index fell 18.36 points, or 0.43 percent, to close at 4,259.52 points. The Nasdaq Composite Index lost 125.58 points, or 0.95 percent, to close at 13,129.96 points.
European shares are falling
Shares in the euro zone fell, Thursday, following the European Central Bank surprised markets by accelerating the exit from the stimulus programs linked to the Corona virus pandemic.
The euro zone stock index closed 2.5 percent lower following falling to three percent earlier, while the Stoxx 50 blue chip index fell three percent.
But eurozone bond yields rose, enabling bank stocks to offset some of the session’s losses, as the European Central Bank plans to end asset purchases in the third quarter sooner than expected, prioritizing curbing high inflation caused by the potential economic fallout from Russia’s invasion of Ukraine.
The German and French indices each fell regarding three percent, while the Italian index lost 4.2 percent. The broader Stoxx 600 index fell 1.7 percent.
Auto stocks led losses in Europe, as BMW shares fell 5.5 percent, despite doubling its profits in 2021 compared to pre-pandemic rates.
The results come a day following European stock markets made big gains when Russia and Ukraine indicated their willingness to hold talks.
But the foreign ministers of the two countries made it clear that no progress has been made following a meeting between negotiators of the two sides, coinciding with the war entering its third week.
Japan
The Japanese Nikkei index recorded the largest rise in 21 months, Thursday, following the footsteps of global stocks, in light of the recovery of market sentiment; It looked as if Ukraine and Russia would resume diplomatic talks, with oil prices pulling back some of their recent gains.
The Nikkei rose 3.94% to close at 25690.40 points, and the prices of 222 shares rose from the 250 listed on it. This rise came following the index lost 7% in the previous four sessions, to its lowest level since November 2020, which amounted to 24,681.74 points, on Wednesday.
Shares of all sectors rose on Thursday, and the basic materials sector achieved the largest gains, jumping 6.18%, followed by the real estate and consumer sectors, which are closely related to the economic cycle, by 4.72%, and the technology and automobile sectors also rose.
The broader Topix index rose 4.04% following falling 6.5% in the previous four sessions.
Showa Denko Chemical Co. was the biggest gainer on the Nikkei as a percentage, increasing 10.40%. In the auto sector, Suzuki shares rose 8.85%, Nissan 8.61%, and Toyota 5.42%.
Chip maker Tokyo Electron rose 4.81%, Advantest 3.89%, and Renesas 4.97%. (Archyde.com)
