Global stocks, oil prices higher before likely US rate hike
BEIJING (AP) — Major global stock markets and Wall Street futures advanced Wednesday as traders prepared for a possible sharp interest rate hike by the Federal Reserve to cool surging inflation.
London and Frankfurt opened higher. Tokyo and Sydney gained while Shanghai declined. Oil prices rose.
The Fed on Wednesday is expected to announce an increase of up to three-quarters of a percentage point in its benchmark interest rate, triple its usual margin. Investors worry such aggressive action by the Fed and other central banks in Europe and Asia to control inflation that is at multi-decade highs might derail global economic growth.
“The main risk at this stage is in fact an inflation ‘overkill’ with monetary tightening too abrupt, unnecessarily pushing up the unemployment rate,” Thomas Costerg of Pictet Wealth Management said in a report. Costerg said most economic indicators and lower commodity prices already point to slower inflation ahead.
In early trading, the FTSE 100 in London rose 0.5% to 7,345.81. The DAX in Frankfurt rose 0.3% to 13,136.88 and the CAC 40 in Paris advanced 0.3% to 6,230.48.
The future for Wall Street's benchmark S&P 500 index was up 0.9% and that for the Dow Jones Industrial Average added 0.4%.
On Tuesday, the S&P 500 fell 1.2% after Walmart warned inflation that has spiked to a four-decade high of 9.1% hurts American consumer spending.
The Dow dropped 0.7% and the Nasdaq composite closed 1.9% lower.
In Asia, the Shanghai Composite Index lost less than 0.1% to 3,275.76 while Tokyo's Nikkei 225 advanced 0.2% to 27,715.75. The Hang Seng in Hong Kong sank 1.4% to 20,620.10.
Sydney’s S&P-ASX 200 added 0.2% to 6,823.20 after data showed Australian inflation rose to 6.1% in the latest quarter from 5.1% but the increase was smaller than...
