Tuesday, February 11, 2025
27 C
Brunei Town
More

    Gobal shares mixed amid speculation about Fed rate hike

    TOKYO (AP) – Global shares were mixed yesterday amid speculation about another interest rate raise by the United States (US) Federal Reserve. Benchmarks in Asia finished lower in Japan, Australia, South Korea and China, but European indexes were mixed, rising in France and Germany while falling in Britain. Oil prices rose.

    France’s CAC 40 added 0.2 per cent in early trading to 6,391.76. Germany’s DAX rose 0.3 per cent to 13,265.61. Britain’s FTSE 100 fell 0.4 per cent to 7,503.25. US shares were set to drift higher with Dow futures up 0.3 per cent at 33,145.00. S&P 500 futures were up 0.3 per cent at 4,153.25.

    Investors are grappling with uncertainty over when the highest US inflation in decades will ease significantly, how much the US Fed will have to raise interest rates in order to get it under control and how much the rate hikes will slow the economy.

    Investors will be looking for insight into these unknowns later this week, when the Federal Reserve holds its annual meeting in Jackson Hole, Wyoming.

    “The downbeat mood in Wall Street is playing out in the Asia session as well, and although another round of rate cuts to the benchmark lending rate in China yesterday may aid to cushion some losses, overall upside could still remain limited amid the shunning of risks,” said market strategist at IG in Singapore Yeap Jun Rong.

    The People’s Bank of China cut a lending rate on Monday, a week after it cut interest rates.

    Japan’s benchmark Nikkei 225 lost 1.2 per cent to finish at 28,452.75. Australia’s S&P/ASX 200 slid 1.2 per cent to 6,961.80. South Korea’s Kospi dipped 1.1 per cent to 2,435.34.

    A woman walks in front of an electronic stock board showing Japan’s Nikkei 225 and New York Dow indexes at a securities firm. PHOTO: AP

    Hong Kong’s Hang Seng shed 0.8 per cent to 19,503.25, while the Shanghai Composite was little changed, inching down less than 0.1 per cent at 3,276.22.

    “Investors are being cautious as continuous risk-off flows have hit global markets,” said Anderson Alves at ActivTrades, noting that rising gas prices were a big risk, especially for Europe.

    Bond yields gained ground. The yield on the 10-year Treasury, which influences rates on home mortgages and other loans, rose to 3.03 per cent from 2.97 per cent late Friday.

    The broader market’s losses come on the heels of a weekslong rally. Investors are trying to figure out where the economy goes from here as stubbornly hot inflation hurts businesses and consumers. Record-high inflation also has investors focussing on central banks and their efforts to fight high prices without further damaging economic growth. “You’ve had quite a rally and there’s reason to not be sure where we’re going from here,” said senior portfolio manager with Globalt Investments Tom Martin. “There’s still decent potential for a recession.”

    Minutes last week from the Federal Reserve’s July board meeting affirmed plans for more rate hikes despite signs of weaker economic activity. Traders worry aggressive steps to slow the economy might go too far and bring on a recession.

    Fed Chair Jerome Powell is scheduled to give a speech on Friday morning at the central bank’s annual meeting. The Fed is holding its meeting following a heavy week of company and economic data that showed inflation is still squeezing the economy, but consumer spending remains resilient.

    “I don’t think we’re out of the woods yet on inflation,” Martin said. “We still don’t really know how inflation is going to pan out and what the Fed is going to do”.

    spot_img

    Related News

    spot_img