Mar­kets higher ahead of Fed rate call

The Gulf Today - Business - - FRONT PAGE -

LON­DON: Stock mar­kets mostly rose on Wed­nes­day ahead of an ex­pected in­ter­est rate hike from the US Fed­eral Re­serve, traders said.

As the eu­pho­ria over the his­toric sum­mit be­tween US Pres­i­dent Don­ald Trump and North Korea leader Kim Jong Un re­cedes, in­vestors are fo­cus­ing on macroe­co­nomic is­sues with con­cerns over global trade caus­ing some dis­com­fort.

“With a rate hike widely ex­pected, in­vestors are fo­cused on the Fed’s state­ment word­ing, eco­nomic pro­jec­tions and press con­fer­ence for clar­i­fi­ca­tion on the fu­ture pace of in­ter­est rate hikes,” said Jo Hor­ton, a se­nior economist at St. Ge­orge Bank in Sydney. Key Euro­pean equity mar­kets were all higher, and Wall Street also showed slight gains at the open­ing bell in New York.

“The week’s prior events have taken a back­seat to to­day’s Fed­eral Re­serve’s rate de­ci­sion, with meet­ings of the Euro­pean Cen­tral Bank and the Bank of Ja­pan loom­ing later in the week,” said Charles Schwab an­a­lysts in a note.

Spec­u­la­tion about fur­ther in­ter­est rate in­creases was fu­elled by data Tues­day show­ing US in­fla­tion at a six-year high in May.

The dol­lar con­tin­ued to en­joy sup­port ahead of the Fed de­ci­sion, with the pound ham­strung by Bri­tish Prime Min­is­ter Theresa May’s Brexit strug­gles af­ter she made some big com­pro­mises to push through key leg­is­la­tion.

But the euro was up against the green­back ahead of the ECB’S pol­icy meet­ing on Thurs­day, as it seeks to wind down its cri­sis-era stim­u­lus.

On equity mar­kets, Hong Kong’s main in­dex dropped 1.2 per cent with shares in Chi­nese tele­coms equip­ment maker ZTE col­laps­ing more than 40 per cent as it re­sumed trad­ing af­ter agree­ing to pay a mas­sive fine over its handling of a US sanc­tions vi­o­la­tion.

Reuters

Traders work on the floor of the New York Stock Ex­change on Wed­nes­day.

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