London’s benchmark FTSE 100 index of major blue-chip companies added 1.14% across the session to close at 6,437.80 points yesterday.
AFP
London
Europe’s major stock markets firmed yesterday, closing higher ahead of the US Federal Reserve’s decision on borrowing costs in the world’s biggest economy.
Investors were waiting on the US central bank’s announcement, scheduled for 1800 GMT and set to signal the next step for US interest rates.
“European stocks are putting in a robust performance as investors pile in ahead of the US Federal Reserve’s interest rate decision,” said analyst Manoj Ladwa at brokerage TJM Partners in London.
“Given recent weak economic data, market participants are expecting the Fed to hold its hand.
“But any shock announcement is likely to send the markets into a tailspin.”
At the height of the global financial crisis in 2008 the Fed slashed interest rates to near zero to stimulate growth, and introduced an unprecedented bond-buying scheme that effectively kept long-term borrowing costs down.
The market’s attention will be on how the Fed views US economic prospects for the months to come, with most bets on a rate rise being delayed at least until March.
London’s benchmark FTSE 100 index of major blue-chip companies added 1.14% across the session to close at 6,437.80 points.
In the eurozone, Frankfurt’s DAX 30 closed up 1.31% to 10,831.96 points with Volkswagen posting better than expected results, albeit unveiling a first quarterly loss in 15 years on the back of the global pollution-cheating scandal.
In Paris, the CAC 40 rose 0.9% compared with Tuesday’s close to 4,890.58.
The European single currency meanwhile strengthened to $1.1069 from $1.1041 late in New York on Tuesday.
US stocks opened mostly higher, the Dow Jones Industrial Average climbing 0.26% to 17,627.96 points in the first five minutes of trading.
The broad-based S&P 500 advanced 0.16% to 2,069.11, while the tech-rich Nasdaq Composite Index dipped 0.05% to 5,027.70.
The two-day Fed meeting opened on Tuesday amid more signs of slower US economic activity that would further justify a delay to increasing the federal funds rate: consumer confidence sagged and durable goods orders fell for a second straight month in September.
“We have reached the penultimate decision of the year and despite the Fed’s constant insistence that rates should rise this year, the market is becoming increasingly confident that it won’t happen,” said Oanda analyst Craig Erlam.
“Investors have been doubting the Fed’s position for a while and the softening in the data in the last couple of months has only increased the belief that rates won’t rise.”
