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Highlights
The Australian share market is likely to rebound on Thursday.
According to the latest SPI futures, the ASX 200 is expected to open 16 points or 0.25% higher.
On Wall Street, the Dow Jones rose 1%, the S&P 500 surged 1.45%, and the NASDAQ ended 2.5% higher.
The Australian share market is likely to rebound on Thursday following a robust overnight trade on Wall Street. The US stocks rose after Federal Reserve hiked interest rates by 75 basis points, the biggest increase since 1994, and assured that the pace of policy tightening in the future would be more moderate.
According to the latest SPI futures, the ASX 200 is expected to open the day 16 points or 0.25% higher. On Wednesday, the benchmark index fell 1.3% to 6,601 points.
On Wall Street, the Dow Jones rose 1%, the S&P 500 surged 1.45%, and the NASDAQ ended 2.5% higher.
The S&P 500 rallied on Wednesday to snap a five-session losing streak, which was its longest since early January.
At a news conference following the rate rise, Fed Chair Jerome Powell said that either a 50 or 75-basis-point rate increase at its next policy meeting in July seemed most likely, and that the economy was strong enough to handle tighter policy.
In Europe, the Stoxx 50 rose 1.6%, the FTSE gained 1.2%, the CAC surged 1.4%, and the DAX ended 1.4% higher.
MSCI's gauge of stocks across the globe also leapt 1.13%.
Global stocks and bonds had rallied on Wednesday before the Fed meeting, buoyed by a surprise announcement from the European Central Bank (ECB) that it would work to avoid a debt crisis due to rising borrowing costs by supporting high-debt member states and devising a new tool to manage the risks.
Bond yields
- 10-year yield: US 3.28%, Australia 4.19%, Germany 1.63% (US prices as of 4.23 PM in New York)
Oil prices fall
Oil prices fell more than US$3 on Wednesday as markets worried about a fall in demand after the Federal Reserve hiked interest rate by three-quarters of a percentage point.
- Brent crude futures for August settled down 2.2% at US$118.51 a barrel, having fallen as low as US$117.75.
- WTI crude for July fell 3.04% to US$115.31 a barrel, after dropping to a low of US$114.60.
Gold prices inch higher
Gold, which has taken a hammering from inflation and a sky-high dollar, also rose on the Fed's rate rise. It jumped 1.4% to US$1,830.31 an ounce. Oil prices stumbled after the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast that world oil demand will exceed pre-pandemic levels in 2022.
- Brent crude was more than US$2 softer at US$119.04.
- WTI crude also lost US$3 to US$118.93 per barrel.
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