World stocks scale 2-month high boosted by rate cuts bets
By Koh Gui Qing and Danilo Masoni
NEW YORK/MILAN (Reuters) -World shares extended gains on Wednesday and the dollar stemmed losses as expectations of an end to a global rate hike cycle spurred on investors following benign inflation readings in the U.S. and across Europe.
By 1523 GMT, the MSCI world equity index, which tracks shares in 49 countries, jumped 0.8% to its highest since mid-September, following a positive session in Europe and a rally across Asia, aided by a report of stimulus in China.
Stocks also rose across the board on Wall Street. The S&P 500 Index rose 0.5%, the Dow Jones Industrial Average added 0.4%, and the Nasdaq Composite Index climbed 0.6%.
U.S. retail sales fell in October, though by less than expected, giving some investors cause to celebrate that the U.S. economy is poised for a soft-landing and that Federal Reserve is likely done raising rates.
Recent U.S. data «supports our view that consumer price inflation will continue to fall more rapidly than many expect, even as activity in the real economy holds up under the weight of higher rates,» economists at Capital Economics said in a note.
The pan-European STOXX 600 index gained 0.5% after data showed British inflation cooled more than forecast in October, hitting sterling and reinforcing bets the Bank of England will be cutting rates by the middle of 2024. (EU)
«Good weather seems to be back. The market is starting to price in the possibility of rate cuts in the United States and also in Europe,» said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan.
«I think the equity rally will continue into 2024 and so will bonds of course, subject to the international picture that remains complicated with the war in Ukraine, the
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