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Friday, December 3, 2021

Global stock indices vary after the Fed announced its readiness to act in the face of inflation

BEIJING. On Thursday, global stock markets were mostly higher after the Federal Reserve officials said they were ready to raise interest rates earlier than expected, if necessary to reduce inflation in the United States.

Markets in London, Tokyo, Frankfurt and Hong Kong rose, while Shanghai markets declined.

Wall Street futures were higher. US markets were closed for Thanksgiving. They reopen on Friday for a shortened trading session.

Fed officials at their October policy meeting said they would “not hesitate” to respond to inflation, according to notes released Wednesday. They foresaw the possibility of a rate hike “earlier than the participants had anticipated.”

This heightened investor fears that the Fed and other central banks may feel pressure to remove the economic stimulus that drove stock prices up. Earlier, Fed officials indicated that they may raise rates at the end of next year.

Higher prices, coupled with more active hiring in the US, suggest that attitudes towards the next Fed meeting could be “clearly more hawkish,” Mizuho Bank’s Tan Boon Heng said in a report.

In early trading, the London FTSE rose less than 0.1% to 7,289.90, while the Frankfurt DAX added 0.3% to 15,927.78. The CAC 40 in Paris added 0.3% to 7,063.84.

S&P 500 and Dow Jones Industrial Average futures were up 0.3 percent.

In Asia, the Shanghai Composite Index lost 0.2% to 3,584.18, while the Nikkei 225 in Tokyo rose 0.7% to 29,499.28. The Hang Seng Index in Hong Kong rose 0.2% to 24,740.16.

Seoul’s Kospi shed 0.5 percent to $ 2,980.27 after Korea’s central bank raised its policy interest rate by 0.25 percentage points to 1 percent, in line with expectations.

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A foreign exchange trader watches monitors in the foreign exchange trading floor of KEB Hana Bank’s headquarters in Seoul, South Korea on November 25, 2021 (Ahn Yeon-joon / AP Photo)

Sydney’s S & P-ASX 200 added 0.1% to 7,407.30, while India’s Sensex added 0.8% to 58,811.46. New Zealand and Jakarta advanced, while Bangkok fell into disrepair.

On Wall Street, the S&P 500 is up 0.2%. The gains in technology, real estate and energy stocks outweighed the decline in banks and commodity companies.

The Dow fell less than 0.1 percent, while the Nasdaq composite added 0.4 percent.

The Fed said in its notes that officials still believe the surge in inflation this year is likely to be temporary, but acknowledged that prices have risen more than expected.

The notes dealt with the October meeting at which members of the Federal Reserve Board voted for the first steps to abolish concessional lending and other measures to support economic recovery after the coronavirus pandemic.

Inflationary pressures and disruptions in the supply of raw materials and components have affected a wide range of industries. Forecasters fear consumers could cut spending if retail prices continue to rise.

Consumer spending rose 1.3% in October, just over double the previous month, according to the US Department of Commerce.

The Labor Department said the number of Americans who filed for unemployment benefits fell last week to its lowest level in more than half a century.

In energy markets, US benchmark crude lost 5 cents to $ 78.34 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, which is used to determine oil prices on world markets, rose in London by 10 cents to $ 81.15 per barrel.

The dollar fell to 115.36 yen from 115.48 yen. The euro rose to $ 1.1221 from $ 1.1999.

Joe Macdonald

Associated Press

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