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Sunday, December 10, 2023

Global shares rise on hopes the Fed’s rate hikes are done

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TOKYO—Global shares were mostly higher Thursday after the US Federal Reserve indicated it may not need to pump the brakes any harder on Wall Street and the economy.

France’s CAC 40 rose 1.2 percent to 7,018.50. Germany’s DAX gained 1.1 percent to 15,084.21. Britain’s FTSE 100 climbed 1.0 percent to 7,417.45. The future for the Dow Jones Industrial Average was up 0.3 percent and that for the S&P 500 gained 0.5 percent.

In Asian trading, Japan’s benchmark Nikkei 225 gained 1.1 percent to finish at 31,949.89.

In Japan, Prime Minister Fumio Kishida announced an economic stimulus package worth about $113 billion that is meant to cushion the blow to household budgets from rising inflation and timed to counter weakening public support for his government. The package includes tax breaks for individuals and companies and subsidies to reduce rising energy costs.

Australia’s S&P/ASX 200 jumped 0.9 percent to 6,899.70. South Korea’s Kospi surged 1.8 percent to 2,343.12.

Hong Kong’s Hang Seng added 0.8 percent to 17,230.59. But the Shanghai Composite fell 0.5 percent to 3,009.41 after the central bank reported a decline in property loans, the first such drop since 2005.

On Wednesday, the S&P 500 rose 1.1 percent and the Dow industrials gained 0.7 percent. The Nasdaq composite jumped 1.6 percent.

Fed Chair Jerome Powell said the central bank is unsure that its main interest rate is high enough to ensure high inflation will move down to its 2 percent target. That kept alive the possibility of more hikes by the Fed. He also said the Fed is not considering cuts to interest rates, which can act like steroids for financial markets.

But Powell acknowledged that a recent run higher in longer-term Treasury yields, and the tumble in stock prices that helped cause, are working on their own to slow the economy and could be starving high inflation of its fuel. If they can do that persistently, he indicated they could help the Fed whip inflation without requiring more rate hikes.

In energy trading, benchmark US crude added $1.32 to $81.76 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained $1.23 to $85.86 a barrel.

The US dollar edged down to 150.39 Japanese yen from 150.96 yen. The euro cost $1.0609, up from $1.0570. AP

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