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World Shares Track Wall Street's Slump 09/21 05:08
World shares have declined, echoing a slump on Wall Street after the Federal
Reserve said it may not cut interest rates next year by as much as it earlier
thought.
(AP) -- World shares have declined, echoing a slump on Wall Street after the
Federal Reserve said it may not cut interest rates next year by as much as it
earlier thought.
Benchmarks fell by 1% or more in Paris, Tokyo, Sydney and Hong Kong. U.S.
futures slipped and oil prices also were lower.
On Wednesday, the Fed held its main interest rate steady at its highest
level in more than two decades, as was expected. Officials also indicated they
may raise the federal funds rate once more this year, as they try to get
inflation down to a 2% target.
High rates hurt prices for all kinds of investments, and the news cast a
pall on trading Thursday.
"Moving forward, traders will scrutinize every piece of data from the US,
with a particular emphasis on inflationary indicators, to gauge the potential
for prolonged high rates," Anderson Alves of ActivTrades said in a commentary.
Germany's DAX declined 0.7% to 15,673.52 and the CAC 40 in Paris retreated
1% to 7,262.44. Britain's FTSE 100 gave up 0.4% to 7,698.07.
On Wall Street, the future for the S&P 500 was down 0.3% while that for the
Dow Jones Industrial Average fell 0.2%. On Wednesday, the S&P 500 fell 0.9% and
the Dow industrials lost 0.2%. The Nasdaq composite dropped 1.5%.
The Fed's chair, Jerome Powell, said the Fed is close to hitting the peak on
rates, if not there already.
Powell, though, stressed that forecasts about where rates and other
indicators are heading could change as more data come in.
"Forecasters are a humble lot, with much to be humble about," Powell said.
In Asian trading, Hong Kong's Hang Seng lost 1.3% to 17,665.41 and the
Shanghai Composite index gave up 0.8%, to 3,084.70.
Tokyo's Nikkei 225 was off 1.4% at 32,571.03, while in Seoul the Kospi shed
1.6% to 2,514.97. Australia's S&P/ASX 200 slipped 1.4% to 7,065.20.
Shares of electronics and energy giant Toshiba Corp. gained 0.2% Thursday
after it announced that a 2 trillion yen ($14 billion) tender offer for the
troubled electronics and energy giant by a Japanese consortium has been
completed, clearing the way for it to be delisted.
New Zealand's benchmark stock index fell less than 0.1% as figures released
Thursday by Statistics New Zealand indicated the economy expanded at a 3.2%
annual pace in the April-June quarter. In quarterly terms, GDP rose by 0.9% .
Finance Minister Grant Robertson said the economy was turning a corner and
growing at twice the rate predicted by economists.
The figures come three weeks before a general election and on the same day
that dairy exporter Fonterra reported a 170% increase in its annual after-tax
profit to 1.6 billion New Zealand dollars ($948 million). Fonterra warned,
however, of falling milk prices due to reduced demand for milk powder from
countries like China. Its shares jumped 3.1%.
Fed officials suggested they may cut rates in 2024 by only half a percentage
point from where they're expected to end this year. That's less than the full
percentage point of cuts they were penciling in as of June.
In other trading Thursday, U.S. benchmark crude oil lost 92 cents to $88.73
a barrel in electronic trading on the New York Mercantile Exchange. It gained
82 cents on Wednesday.
Brent crude, the pricing basis for international trading, declined 95 cents
to $92.58 a barrel.
The U.S. dollar slipped to 148.19 Japanese yen from 148.35 yen. Traders are
watching to see what the Bank of Japan does when it wraps up a monetary policy
meeting on Friday. No major changes are expected, but analysts say they believe
the central bank is moving toward a change in its longstanding negative
interest rate policy.
The euro weakened to $1.0642 from $1.0661.
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