Markets Mixed After ECB Hikes Rate By 75 bps

  • Market Overview

Global markets were mixed on Thursday after investors were surprised by some economic data releases. The local bourse closed flat by 0.03% after “data showed the US economy grew at a faster-than-expected pace in the third quarter and the European Central Bank raised its benchmark interest rate for the third time this year,” stated Business Day.

A first estimate showed that the US economy grew at an annualised 2.60% in the third quarter or this year “ending two straight quarters of declining output and easing concerns about a recession in the world’s biggest economy.” However, this did not positively impact all US markets with the S&P 500 and Nasdaq trading in the red at 21h30, while the Dow was up by 0.88%.

European markets closed higher, even in muted sentiment after the European Central Bank (ECB) raised its key interest rate by 75 basis points. However, “markets found the ECB tone less hawkish and slightly reduced the future rate hike bets,” added Trading Economics.

Asian markets were mixed with the Hang Seng closing up by almost 3% as “market participants tried to focus on cheap valuations and solid corporate earnings,” added Trading Economics. However, Japan’s Nikkei closed lower tracking a weak Wall Street, while China’s Shanghai fell by 0.55% “as Chinese cities doubled down on Covid control measures in a bid to arrest widening outbreaks.”

The price of Brent crude rose to $96.75 a barrel at 21h45, while the price of gold fell slightly to $1 661.38 at the same time.

PSG Wealth Daily Investment Update, 28 October 2022

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