World markets are growing despite the Fed’s rising interest rates

BEIJING, China – Global stocks rose on Thursday after the chairman of the Federal Reserve downplayed the likelihood of higher interest rates after the biggest rise in the U.S. central bank in two decades.

London and Frankfurt opened higher on their first trading day following comments by Fed Chairman Jerome Powell. Shanghai and Sydney advanced, while Hong Kong ended lower. Markets in Japan and South Korea were closed for the holidays.

Futures on Wall Street fell the day after the benchmark S&P 500 gained 3% for the biggest one-day rise in two years.

The Fed raised its key interest rate on Wednesday by half a percentage point, or twice the usual margin. But Powell said the U.S. central bank was “not actively considering” a larger increase.

“The Fed continues to try to arrange a soft landing while battling high inflation,” David Chao of Invesco said in a report.

At the start of trading, the FTSE 100 in London jumped 1.2% to 7,583.72. The Frankfurt DAX rose 1.6% to 14,196.71. CAC 40 in Paris increased 1.8% to 6,507.98.

On Wall Street futures, the S&P 500 fell 0.8% and the Dow Jones Industrial Average fell 0.5%.

On Wednesday, the Dow jumped 2.8% and the Nasdaq – by 3.2%.

The Fed has raised its key rate to a range of 0.75% to 1%, the highest since the coronavirus pandemic two years ago.

Powell’s comments seemed to allay fears that the Fed, which has been accused of reacting too slowly to inflation last year, could aim for an unusually large rate increase of three-quarters of a percentage point at its June meeting.

Investors are worried about whether the Fed will be able to suppress inflation without pushing the economy into recession.

The Fed has announced details of how it will begin to reduce its Treasury loans and mortgage securities. The central bank buys bonds to pump money into the financial system and lower long-term interest rates.

In Asia, the Shanghai Composite Index rose 0.7% to 3,067.76, while Hong Kong’s Hang Seng lost 0.4% to 20,793.40, spending most of the day in positive territory.

Hikvision Digital Technology Co., a manufacturer of CCTV equipment, fell 10% of its daily limit on the Shanghai Stock Exchange after The Financial Times reported that U.S. officials are considering adding a Chinese company to a list of restricted organizations that Americans are barred from dealing with. . with security considerations.

The Sydney S&P-ASX 200 rose 0.8% to 7364.70 and the Indian Sensex rose 0.3% to 55854.82. New Zealand won, while Singapore and Bangkok declined.

In energy markets, U.S. benchmark oil fell 2 cents to $ 107.79 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract jumped from $ 5.40 to $ 107.81. Brent crude, which is the basis of international oil prices, rose in London by 22 cents to $ 110.36 a barrel. Over the previous session, it rose $ 5.17 to $ 110.14.

The dollar rose to 129.72 Japanese yen from 128.87 yen on Wednesday. The euro fell to $ 1.0599 from $ 1.0613.