Global Shares Drop – the Fed Sign of Rapid Rising Rates
Global shares drop while the Fed’s sign of rapid rising rates – Wall Street futures and global stocks fell on Thursday. After investors saw the minutes of the Federal Reserve session; As a sign that the US Federal Reserve may raise interest rates faster to reduce inflation. In Frankfurt and London, benchmarks opened up more than 1%. Tokyo lost almost 3%. Records from the Fed meeting last month showed that policymakers believe; The US job market is healthy enough to require ultra-low rates. Traders doubt that this is a sign that the Fed may be more strict toward pulling back on stimulus; Which raises stock prices.
A report by Mizuho Bank said the information disrupted markets by breaking expectations; Although the Fed’s earlier plans were locked. The FTSE 100 lost an all-time high of 7.435.95 in early trading in London. DAX dropped to 16.046.83. In total, it fell by 1.4%. CAC 40 fell to 7.255.16, up 1.6%.
The S&P 500 fell 1.9% on Wednesday. The Dow fell 1.1%. The Nasdaq was down 3.3%. This is the most significant one-day drop in the last 11 months. The Nikkei 225 fell to 28.487.87 and fell 2.9%. The Shanghai Composite Index lost 0.2%; The total was 3,586.08. Hang Seng finished at 23,072.86. Kospi fell to 2,920.53, up 1.1% overall. S&P-ASX 200 dropped to 7,358.30; In total, it decreased by 2.7%. Sensex fell 1.3% to 59,546.57.
Fed and Current Results
The Fed indicated that stimulus reduction plans would be accelerated; Since then, consumer inflation in the US has reached a 39-year high. This shook investors encouraged by more robust corporate profits; The spread of coronavirus vaccination has also been affected. Nevertheless, the S&P 500 ended 2021 with an annual increase of 26.9%. Bond yields expanded on Wednesday; After the Fed, notes came out.
The interest rate on 10-year treasury bonds increased from 1.68% to 1.70%. The Fed minutes showed that policymakers were concerned; Regarding the fact that inflation extended to more areas of the economy. Consequently, it would last longer than expected. They discussed the possible need to raise short-term interest rates more rapidly. Also, purchasing bonds that bring money into the financial system would have been reduced earlier.
Four out of five shares fell in the S&P 500. The biggest problem in the market was the tech companies. Microsoft dropped 3.8%. Adobe experienced a 7.1% decline. US benchmark oil for energy markets was $77.60 a barrel; Lost a total of 25 cents. The contract rose to $77.85, for a total of 86 cents. Brent oil, down 33 cents; The total was up to $80.47 per barrel. The previous session had a profit of $80.80. The dollar fell to 115.74 yen on Wednesday. The euro fell to $1.1293.
IT promotions have failed to impress investors for the second day in a row. The BSE IT sector gauge fell more than 2 percent during the day. Zensar Technologies and Persistent Systems have the weakest share in the technical stock package. Shares of Zensar Technologies fell nearly 5 percent. Shares of IT major Infosys fell 2.4 percent during the day. TCS lost 2.32 percent.
It is worth noting that several analysts have recently supported IT promotions. They predict that their growth will continue in the medium term. Stock market dynamics drive many investments in startups. This can also affect the demand for IT services. Experts also point to the expensive valuation of stocks. According to them, technical actions are ahead of expectations.
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