Stock indices of Western European countries are falling at the auction on Thursday against the backdrop of tightening monetary policy by the central banks of the world.
The composite index of the largest companies in the region Stoxx Europe 600 by 11:25 quarter fell by 0.72% and amounted to 404.1 points.
The British stock index FTSE 100 is falling by 0.36%, the French CAC 40 – by 0.68%, the German DAX – by 0.56%. The Italian FTSE MIB and the Spanish IBEX 35 are down 0.1% and 0.2% respectively.
Investors evaluate the results of the September meeting of the Federal Reserve System (FRS). The American Central Bank raised the interest rate on federal funds (federal funds rate) by 75 basis points, now its range is 3-3.25% per annum. The decision, taken unanimously by all 12 voting members of the FOMC, coincided with the forecasts of most economists and analysts.
The Fed raised its base rate by 75 bp. for the third meeting in a row. It is now at its highest level since the 2008 financial crisis. At the same time, based on FRS estimates, by the end of 2022 the rate will reach 4.4% per annum.
The Swiss Central Bank on Thursday announced a rate hike by 75 bp, to 0.5% per annum. The regulator is resorting to raising the rate for the second time in a row to combat high inflation: in June, the rate was raised by 50 bp to minus 0.25% per annum. Prior to this, the interest rate in Switzerland had been at minus 0.75% since 2015.
The Swiss Central Bank has become the latest of the European monetary policy regulators to end the era of negative interest rates.
Inflation in Switzerland in August was recorded at the highest level over the past thirty years – 3.5% in annual terms.
The market is now waiting for the publication of the decision of the Bank of England on the rate, which will take place at 14:00 Moscow time. The British Central Bank will consider the possibility of raising the key interest rate by 75 bp, from the current 1.75% to 2.5% per annum, against the background of record inflation in the country and the depreciation of the pound sterling, analysts believe.
If the forecast comes true, then the rate of rate hike will be the highest since 1989. Since December last year, the British central bank has raised it six meetings in a row, most recently by 50 bp.
Shares of the Finnish energy company Fortum Oyj (+7.4%), which owns the German Uniper, continue to rise in price on news of the sale of a 56% stake in Uniper to the German government.
The price of securities of the Swiss bank Credit Suisse Group AG is reduced by 0.5%. The British edition of the Financial Times, citing sources, said that the bank plans to split the investment banking division into three separate businesses and sell some profitable divisions.
Stock quotes of the French hotel chain owner Accor S.A. fall 7.4% after JP Morgan downgraded the company’s rating from neutral to below market, expressing concern that Accor will not be able to return to pre-pandemic levels of profitability.
