Global stocks rally, as Fed fuels up rate-cut optimism


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Global stocks rally, as Fed fuels up rate-cut optimism

On Thursday, the 20th of June 2019, a gauge of global stock markets rose, while Wall St. has been expected to open higher, after US Federal Reserve had signaled possibilities of an interest rate cut as early as next month, but global bond yields took a tumble and the US 10-year yields had curbed more than 2 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.92 percent, while mainland China had been leading the charges with a gain of 2.38 percent so far. Meanwhile, Japan’s Nikkei had rounded off the day 0.60 percent higher, while Hong Kong and Bombay Stock Exchange were up by 1.08 and 0.60 percent respectively for the moment being.

Aside from that, the MSCI’s ACWI, which keeps track of 49 stock exchanges across the world had headed off some of its grievous losses witnessed following US President Donald Trump’s threat of imposing punitive tariffs on all of Chinese imports worth of about $500 billion, and was 0.33 percent up for the moment being, while European shares had opened broadly higher with regional Pan-European STOXX added 0.5 percent during the late-morning European trading hours.

Adding that the Fed’s shift of stance from ‘Patience’ to ‘React accordingly’ would prompt many other countries to ease their policies to offset risks of global slowdown, a portfolio strategist at State Global Advisors, Hiroshi Yokotani said, “As the Fed’s policy is turning, central banks in many other countries will face pressure, including those from markets, to ease their policy”.