European stocks fell on Thursday as investors reacted to policy decisions from central banks. The Stoxx Europe 600 was down 0.4% ahead of the European Central Bank meeting. Germany’s Dax fell 0.7%, France’s Cac 40 dropped 0.8%, and the FTSE 100 was flat. In Asia, stocks rallied after the People’s Bank of China cut its medium-term policy rate due to slowing economic growth. The S&P 500 finished 0.1% higher on Wall Street after the Federal Reserve held interest rates steady. Traders expect the ECB to increase its deposit rate to 3.5% to control inflation. The Hang Seng China Enterprises index rose 2% and the CSI 300 gained 1.6% following the PBoC’s rate cut. China’s economic recovery is slowing, with growth in retail sales and industrial output falling short of expectations. Analysts doubt the rate cut will be enough to stimulate growth. The US Federal Reserve announced it would keep the federal funds rate steady at 5-5.25%. The dollar strengthened against peer currencies. In government debt markets, the two-year Treasury yield and the benchmark 10-year note yield both increased. Wall Street contracts slipped ahead of the New York open.

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