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Global stock markets diverged Friday as investors contemplated central bank signals that interest rates will remain high to combat stubborn inflation. online news
Wall Street opened mixed following Thursday’s tumble over fears of a US government shutdown and the Federal Reserve’s warning that borrowing costs would stay elevated for some time even as it paused its hike cycle.
The broad-based S&P 500 gained at the open, as did the tech-rich Nasdaq Composite Index, but the Dow Jones Industrial Average retreated.
Briefing.com analyst Patrick O’Hare said some indices were up as investors snatched cheaper stocks but warned that it was unlikely to prevent a “losing week” for Wall Street.
“The specter of higher rates has cast concerns about a slowdown in borrowing, a slowdown in consumer spending, a slowdown in earnings growth,” O’Hare wrote.
A number of Fed policymakers have said they were confident the United States can avoid a recession even as they push rates to two-decade highs.
The Bank of England (BoE) on Thursday also decided against hiking its interest rate for a 15th time in a row, leaving it at 5.25 percent, the highest level since 2008.
“The no action is quite premature,” Ipek Ozkardeskaya of Swissquote said.
London’s stock market rose Friday but the British pound dipped against the dollar.
“Whatever the Brits will import from now will cost them more than during the last months, when the pound was appreciating,” Ozkardeskaya said, adding that another rate hike is likely on the horizon.
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Major eurozone indices declined as a key survey showed eurozone economic activity shrank further in September but at a slower rate.
UK data revealed retail sales had rebounded in August, offsetting news that contraction in the country’s private sector had picked up speed this month.
In Asia on Friday, the Bank of Japan stuck to its long-term programme of sub-zero borrowing costs.
It comes as BoJ officials face increasing pressure to turn more hawkish as the yen weakens and after fresh data showed inflation remains stubbornly high.
Among individual stocks, Microsoft shares rose after UK regulators dropped their objections to its $69-billion takeover bid for Call of Duty” video-game maker Activision Blizzard.
The US tech titan launched its bid early last year, seeking to establish the world’s third biggest gaming firm by revenue after China’s Tencent and Japan’s PlayStation maker Sony.
Key figures around 1340 GMT
New York – Dow: DOWN 0.4 percent at 34,055.12 points
London – FTSE 100: UP 0.3 percent at 7,697.47
Frankfurt – DAX: DOWN 0.1 percent at 15,552.35
Paris – CAC 40: DOWN 0.5 percent at 7,174.80
EURO STOXX 50: DOWN 0.2 percent at 4,203.70
Tokyo – Nikkei 225: DOWN 0.5 percent at 32,402.41 (close)
Hong Kong – Hang Seng Index: UP 2.3 percent at 18,057.45 (close)
Shanghai – Composite: UP 1.6 percent at 3,132.43 (close)
Euro/dollar: DOWN at $1.0651 from $1.0661 on Thursday
Pound/dollar: DOWN at $1.2264 from $1.2292
Dollar/yen: UP at 148.25 yen from 147.57 yen
Euro/pound: UP at 86.86 pence from 86.71 pence
Brent North Sea crude: UP 0.1 percent at $93.30 per barrel
West Texas Intermediate: DOWN 0.6 percent at $89.63 per barrel
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