Fed and BoE fear of oil interest rates on the stock market |  information

Fed and BoE fear of oil interest rates on the stock market | information


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FRANKFURT (Reuters) – The prospect of the U.S. Federal Reserve’s prolonged fight against inflation and the Bank of England’s XXL rate hike are making investors nervous on European stock markets.

Hopes of a slower rate hike from December, which fueled markets ahead of the Fed’s decision, remained unfulfilled. The Dax fell on Thursday by 1.2 percent to 13,099 points and the EuroStoxx50 fell by one percent to 3,587 points. The American benchmark index also fell by 0.8 percent to 31,878 points. After a further increase in the interest rate of three quarters of a percentage point, the US monetary authority opened the door for the rate to decrease. Fed Chairman Jerome Powell said it was “too early” to consider a pause. BoE Governor Andrew Bailey made a similar statement after the UK’s central bank dared to raise rates to the highest level in 33 years.

“This is a coordinated campaign by many major banks,” said Robert Alster, chief investor at asset manager Close Brothers. “They all agree that this is the right way to fight inflation.”

POWELL STRENGTHENS DOLLAR KING’S BACK – POUNDS UNDER PRESSURE

The price of the “anti-crisis currency” rose again. The dollar index, which reflects the exchange rate against major currencies, gained 1.2 percent to 112.72 points. The pound, on the other hand, extended its losses. It was down 1.6 percent at $1.196 from a 1.3 percent decline to $1.1244.

In the bond market, investors sold current-issue paper in anticipation of higher interest rates. In contrast, the yield on the 10-year US Treasury rose eight basis points to 4.15 percent. Yields also rose in Europe: ten-year federal bonds yielded 2.23 percent after 2.13 percent the previous day. Papers from Apple, Microsoft and Google parent Alphabet were down as much as 3.1 percent. According to experts, rising inflation and higher interest rates will reduce the value of future profits of these high-growth companies.

Fears of falling demand also pushed Brent crude down 1.5 percent to $94.73 a barrel (159 liters) and U.S. crude WTI down 2.1 percent to $88.13 a barrel.

BMW DOWNLOADED – ONLINE SHOPS MUST STOP

Recession worries have overshadowed strong business figures from parent company Opel Stellantis, pushing shares into the red. The papers give the position in Milan by 3.7 percent. Rival BMW also falls under the wheels. The papers regularly fall more than six percent and are headed for their biggest daily loss in half a year. Investors also dumped shares in online pharmacies out of the warehouse. Shares of Apotheke and Zur Rose fell by 12.8 and 17.1 percent, respectively. Traders report that one nationwide pilot scheme for electronic orders in North Rhine-Westphalia has been cancelled.

Investors, on the other hand, snapped up Zalando. Names took first place in the Dax with an increase of more than eight percent. New customer growth and the introduction of lower order value led the online retailer to a jump in profits in the third quarter.

In the US, shares in streaming company Roku and mobile chip specialist Qualcomm fell as much as 13.5 percent on disappointing year-end expectations.

(Reporting by Anika Ross. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).