Global stock markets mostly rise after Fed decision

Published September 27, 2018, 12:00 AM

by manilabulletin_admin

By Agence France-Presse

Most of the world’s stock markets pushed higher and the dollar rose Thursday as investors embraced the Fed’s view that the US economy is growing solidly but not at imminent risk of overheating.

A market board shows the closing numbers on the floor of the New York Stock Exchange (NYSE) on March 1, 2017 in New York City. (Spencer Platt/Getty Images/AFP / MANILA BULLETIN)
A market board shows the closing numbers on the floor of the New York Stock Exchange (NYSE) on March 1, 2017 in New York City. (Spencer Platt/Getty Images/AFP / MANILA BULLETIN)

An exception was Milan, which faltered on worries about its fiscal profile, and Tesla Motors, which dived in after-hours trading on news US securities regulators have charged chief executive Elon Musk for fraud connected to an aborted effort to take the electric car private.

The US central bank on Wednesday hiked interest rates for the third time this year, as expected, citing an increasingly strong economy and jobs market, with Fed governor Jerome Powell saying he saw no vulnerabilities in the financial system.

While Wall Street stocks ended the day down on Wednesday, the market gained on Thursday, with the broad-based S&P 500 climbing 0.3 percent.

European markets also rose solidly.

Powell “was calm and talked about how confident they are that inflation will remain contained,” said Chris Low of FTN Financial.

“The general takeaway was that the Fed is very comfortable and there is no need to overreact on interest rates.”

The rise in the dollar helped perk up European stocks as the slide in the value of the euro and pound helps exporters.

The odd man out was Milan’s FTSE MIB index, which tumbled 0.6 percent on anxiety over the Italian government’s release of its budget.

Late Thursday, hours after the Milan market closed, Italy’s populist government agreed on a deficit target of 2.4 percent of gross domestic product in 2019, a number high enough to likely spark conflict with Brussels.

 
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