Global stocks rise, dollar gains as UK inflation bolsters sentiment
By Herbert Lash
NEW YORK (Reuters) -Global stocks rose and the dollar strengthened on Wednesday after a surprise cooling of British inflation bolstered the risk-off sentiment across markets that anticipate the Federal Reserve next week to hike interest rates for the last time.
The dollar bounced after sentiment was boosted by inflation in the United Kingdom falling more than expected in June to its slowest pace in more than a year at 7.9%. The reading sent the pound sharply lower against other major currencies.
The dollar index rose 0.398% and the euro fell 0.3% to $1.1192.
Gold prices hovered near an eight-week peak hit on Tuesday and oil prices gained more than 1% on expectations that the Fed will have finished its most aggressive rate-hiking in more than four decades when it concludes a two-day meeting on July 26.
Stocks on Wall Street rose as investors looked past poor second-quarter earnings from Goldman Sachs (NYSE:GS) to take comfort in strong profits from smaller players in the banking sector. The KBW bank index rose 1.8%, its third straight day of gains.
Citizens Financial (NYSE:CFG) and M&T Bank (NYSE:MTB) beat Wall Street estimates for second-quarter profit, benefiting from the Fed's rapid rate hikes.
«You have to conclude world growth is healthy. It's certainly not turning down, and that itself is a surprise and boding well for future earnings. Then you have rates which because of inflation seem to be at a peak,» said Brad Conger, deputy chief investment officer at Hirtle Callaghan & Co in Conshohocken, Pennsylvania.
The pan-European STOXX 600 index rose 0.37% and MSCI's gauge of stocks across the globe gained 0.17%.
On Wall Street, the Dow Jones Industrial Average rose 0.39%, the S&P 500 gained 0.27% and the
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