European stocks open higher in November as investors gear up for a key monetary policy announcement from the US Federal Reserve later this week after a sharp rally in Chinese markets I was.
The regional STOXX 600 Europe was up 1.3%, while London’s FTSE 100 was up 1.6%. The rise followed sharp gains in mainland Chinese and Hong Kong stocks. The CSI 300 index of stocks in Shanghai and Shenzhen rose 3.6% for him, while Hang Seng in Hong Kong rose 5.2%.
Analysts said the rise, which helped offset some of the losses since the 20th National Congress of the Communist Party of China ended a week ago, comes as the government considers plans to reopen next year. was fueled by unconfirmed rumors circulating online that it had created a task force for
Most of the day’s rise was posted on social media just before the end of Hong Kong’s morning session, after it was posted on social media as China assesses various reopening scenarios early next year, without naming the source. He suggested that a “reopening committee” had been established.
Analysts said the buying appeared to be motivated by rumors but were skeptical of their veracity.
“Today, a significant number of institutional investors are buying shares,” said Louis Tse, managing director of Wealthy Securities, a Hong Kong-based brokerage firm.
“The numbers are there, there’s a lot of sales, but when China opens up, it’s going to be gradual, not all at once. They can’t afford to have a lot of cases all of a sudden.”
Contracts tracking the Wall Street benchmark S&P 500 also rose 1%, while contracts tracking the tech-heavy Nasdaq 100 traded 1.2% higher.
The S&P 500 fell in the last session, but rose nearly 8% in October. Investors brace for a Fed decision that could help set the market’s trajectory in the coming weeks.
The Federal Reserve (Fed) has raised its key policy rate from near zero to around 3% this year in an aggressive monetary policy tightening. That sent US stocks down from his January all-time highs.
Still, the central bank’s Federal Open Market Committee is expected to implement a fourth consecutive 0.75 percent rate hike on Wednesday to cool inflation, which has remained at the highest level in decades.
Amid growing fears that the U.S. economy is on the brink of recession, investors are eyeing signals that banks could soon slow the pace of rate hikes. Big tech companies have been hit particularly hard With the slowing economy, Uber’s third-quarter earnings and profits beat analysts’ expectations on Tuesday, rising 13% before the start of New York trading.
JP Morgan’s team of analysts, led by chief economist Bruce Kassman, expects the Fed to slow the pace of gains to 0.5 percentage points in December, with “hints” of a change in outlook elsewhere. Stated.
The European Central Bank raised deposit rates by 0.75 percentage points for the second time in a row last month, showing that the fight against inflation is far from over. However, some of the bank’s less aggressive forward guidance has been well received by investors, and many expect the ECB to implement a smaller rate hike next month.
Mr Kassman said the “fading of fiscal stress in the UK” had similarly “opened the door” to a possible 0.5% rate hike at this week’s meeting of the Bank of England. bond market.
UK inflation climbed to a 40-year high in September, but MUFG currency analyst Lee Hardman said “recent changes in the balance between inflation and growth risks” have pushed the BoE down. said its terminal rate expectations had been lowered from about 6/6. 4.75% from St.
In the Treasury market, the 10-year US Treasury yield fell by 0.15 points and the price rose to 3.92%. The equivalent UK government bond yield fell by 0.09 points to 3.43%.