Shares climbed in Europe and Asia, following the Wall Street gains, after the Federal Reserve said it would speed up the withdrawal of the economic stimulus.
Shares surged in Paris, Frankfurt, London and Tokyo. New York futures and oil prices also rose.
The Fed said it would likely hike interest rates three times next year to cope with rising inflation and cut its monthly bond purchases twice as fast as it previously announced. , in order to end it completely in March.
As the United States accelerates its efforts to curb inflation, analysts have said European central banks should not follow suit.
The German DAX jumped 1.8% on Thursday to 15,751.98 and the CAC 40 in Paris rose 1.5% to 7,032.41. The FTSE 100 gained 1.1% to 7,247.49. The future of the S&P 500 was up 0.6% while the Dow Industrials contract gained 0.5%.
In Asian trade, the Tokyo Nikkei 225 index rose 2.1% to 29,066.32 and the Kospi in South Korea rose 0.6% to 3,006.41. The Shanghai Composite Index rose 0.8% to 3,675.02. India and Taiwan were higher, while the Sydney S & P / ASX 200 fell 0.4% to 7,295.70.
In Hong Kong, the Hang Seng recovered its initial losses, gaining 0.2% to 23,475.50.
Latent tensions between Beijing and Washington cast a shadow, analysts say, after the United States House of Representatives passed a resolution banning imports from China’s Xinjiang region over concerns over forced labor and d other abuses.
Apart from that, the United States is reportedly considering sanctions that would prevent companies from supplying equipment to China’s largest computer chip maker, SMIC.
The company’s Hong Kong-traded shares fell 5% on Thursday. They have fallen by almost 22% in the past six months.
“Some concerns about potentially tougher US sanctions have kept investors away as China’s minimum wage is once again under US scrutiny, and that may appear to cap gains for China’s tech sector today. “IG’s Yeap Jun Rong said in a comment.
As the United States accelerates its efforts to fight inflation, European central banks are unlikely to follow suit, analysts said.
“The ECB’s doves are not ready to budge,” Mizuho Bank said in a market report. “On the one hand, if the economic recovery continues, it remains fragile, threatened by the ‘omicron’ variant,” he said.
Germany is in the midst of its worst wave of infections yet. In Asia, South Korea is struggling to fend off the increase in the number of cases.
Major U.S. stock indexes rose on Wednesday after falling ahead of the Fed’s statement at 2 p.m. EST. The S&P 500 rose 1.6% to 4,709.85, recouping almost all of its losses for the week and finishing just below the record it set last Friday.
The Dow Jones Industrial Average rose 1.1% to 35,927.43 and the high tech Nasdaq composite gained 2.2% to 15,565.58. The Russell 2000 index of small business stocks rose 1.6%. Bond yields edged up.
The US central bank has said its monthly bond purchases are no longer necessary with unemployment falling and inflation to a nearly 40-year high. The accelerated schedule puts the Fed on track for a rate hike as early as the first half of next year.
Central bank policymakers were due to announce a faster pullback at their last meeting of the year.
Companies have been grappling with supply chain issues and higher costs for months. This has been a major concern for investors as large corporations pass these costs on to consumers, who have so far absorbed higher prices on everything from groceries to clothing and other consumer goods.
Bond investors reacted more measuredly to the Fed’s announcement. Bond yields edged up, with the 10-year Treasury yield rising from 1.44% Tuesday night to 1.45%.
In other trading Thursday, US crude oil climbed 66 cents to $ 71.53 a barrel in electronic trading on the New York Mercantile Exchange. It gained 14 cents to $ 70.87 a barrel on Wednesday.
Brent crude, the international base of pricing, rose 67 cents to $ 74.55 a barrel.
The US dollar rose from 114.04 yen to 114.06 Japanese yen. The euro fell from $ 1.1292 to $ 1.1319.