The cautious but not alarming message from the American Federal Reserve, with President Powell warning that interest rates may remain high longer than expected but denying the possibility of new hikes, led to a mixed start on European markets. Milan and Frankfurt were just above parity (+0.09%), while London saw a slightly stronger increase and Paris experienced a slight decrease of -0.3%. Asian markets had a hesitant reaction, with Shanghai still closed for holidays. Tokyo and Seoul saw slight decreases, while Mumbai saw a slight increase. Hong Kong’s market stood out with a 2.5% increase, driven by a surge in the real estate sector due to the Chinese government’s decision to repeal a law restricting individuals from buying more than one home in the same city.
The decision to lift the ban was seen as an attempt to boost the real estate sector, which has been suffering due to a stagnant market and the massive debt of some companies. This move led to a positive reaction in Hong Kong’s market, with several real estate stocks gaining between 3.5% and over 7%. Meanwhile, in the United States, the persistent high interest rates have given a boost to the euro against the dollar, with the European currency rising above the 1.07 threshold. Despite the challenges faced by the real estate sector in China and the fluctuations in global markets, the euro has managed to strengthen against the dollar.
The cautious stance taken by the Federal Reserve regarding interest rates has been a source of relief for many investors, as the uncertainty surrounding future rate hikes has been somewhat alleviated. While the possibility of rates remaining high for longer than expected may impact certain sectors, the overall sentiment in the markets remains relatively stable. In Europe, markets have seen a mixed reaction to the news, with some bourses experiencing slight increases while others saw slight decreases.
In Asia, the reaction has also been mixed, with some markets seeing slight declines while others have seen increases. The decision by the Chinese government to lift restrictions on property purchases has had a positive impact on Hong Kong’s market, with the real estate sector showing strong gains. Overall, the global market landscape remains uncertain, with various factors such as interest rates, government policies, and economic indicators influencing market trends.
As investors continue to monitor developments in the global economy, the performance of different markets will be closely watched. While the decision by the Federal Reserve to keep interest rates high may have short-term implications for certain sectors, the overall impact on the global economy remains to be seen. The strength of the euro against the dollar signals a shift in currency dynamics, which could have broader implications for global trade and investment.
