AFP – Global stock markets diverged and the dollar was mixed against main rivals yesterday following an equities rally triggered by a jumbo United States (US) interest rate cut this week.
In early afternoon deals, European stocks pared back hefty gains from the previous session, won after the Federal Reserve opted for a bumper 50-basis-point rate reduction and pledged further cuts as inflation cools.
There had been fears the move could signal officials were worried about the economy and were behind the curve in easing policy.
But data on Thursday showing jobless claims at their lowest since May suggested the US was heading for a soft landing, rather than recession. “The Fed’s decision to cut rates by 50-basis points has been warmly welcomed by markets, with the bank shifting towards a pro-growth stance after years of blindly trying to drive down price pressures at all costs,” said chief market analyst at Scope Markets Joshua Mahony.
Asia’s main stock markets closed out the mostly higher after Thursday’s advances.
