Global stocks tumble after Fed signals faster rate hikes


BEIJING (AP) – Global stocks and Wall Street futures fell on Thursday after investors saw minutes of a Federal Reserve meeting as a sign that the US central bank could raise interest rates faster to calm inflation.

The benchmarks in London and Frankfurt opened down more than 1% while Tokyo lost nearly 3%.

Notes from the Fed’s meeting last month showed policymakers believe the U.S. labor market is almost healthy enough that ultra-low rates are no longer necessary. Traders took this as a sign that the Fed could be more aggressive in reversing the stimulus measures that are pushing stock prices up.

The report “pummeled the markets” by upsetting expectations that the Fed’s earlier plans were stalled, Mizuho Bank’s Vishnu Varathan said in a report.

Early in the session, the London FTSE 100 lost 1.1% to 7,435.95. The Frankfurt DAX fell 1.4% to 16,046.83 and the CAC 40 in Paris fell 1.6% to 7,255.16.

On Wall Street, the future of the benchmark S&P 500 was down 0.3% and that of the Dow Jones Industrial Average was down 0.2%.

On Wednesday, the S&P 500 slipped 1.9% and the Dow fell 1.1%. The Nasdaq composite fell 3.3% in its largest single-day decline in 11 months.

In Asia, the Nikkei 225 in Tokyo lost 2.9% to 28,487.87 and the Shanghai Composite Index lost 0.2% to 3,586.08. The Hang Seng in Hong Kong ended up 0.7% at 23,072.86 after a rally late in the session.

Seoul’s Kospi fell 1.1% to 2,920.53 and Sydney’s S & P-ASX 200 fell 2.7% to 7,358.30.

India’s Sensex index fell 1.3% to 59,546.57. New Zealand, Bangkok and Jakarta fell while Singapore won.

The Fed indicated in mid-December that plans to cut stimulus would be accelerated after US consumer inflation hit a 39-year high.

It shook investors who had been encouraged by rising corporate profits and the spread of coronavirus vaccinations. Despite this, the S&P 500 ended 2021 with an annual gain of 26.9%.

Bond yields, or the difference between today’s market price and payment at maturity, widened on Wednesday after the Fed’s ratings were released.

The yield on the 10-year Treasury bill, the benchmark for fixing rates on mortgages and other loans, fell from 1.68% to 1.70%.

The Fed minutes showed policymakers worried that inflation would spread to more areas of the economy and last longer than expected. They discussed the possible need to raise short-term interest rates at a faster rate and allow bond purchases that pump money into the financial system to decline more quickly.

Four out of five S&P 500 stocks fell. Tech companies have been the biggest drag in the market. Microsoft fell 3.8% and software maker Adobe lost 7.1%.

In energy markets, benchmark US crude fell 25 cents to $ 77.60 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to $ 77.85 on Wednesday. Brent crude, the basis of international oil prices, fell 33 cents to $ 80.47 a barrel in London. It rose 80 cents from the previous session to $ 80.80.

The dollar fell to 115.74 yen from 116.16 yen on Wednesday. The euro fell to $ 1.1293 from $ 1.1311.


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