Red tide in global stock markets: Europe, the US and almost all of Asia experienced a general slowdown on Thursday due to investors’ fears that higher interest rates by the monetary authorities will eventually lead to a recession. On the same day that the UK and Switzerland joined the rate hike movement, European stock exchanges (including Lisbon) lost about 3%, while in the US, Wall Street’s major indexes reacted to the biggest jump in interest rates since 1994 with a devaluation. . it was led by some of the world’s largest technology companies.
In Lisbon, the PSI index fell 2.06%, while the market value of 12 of the 15 companies listed in the index fell. However, it was not the worst drop in Europe, where no area stood out positively: Frankfurt closed 3.31%, Milan fell 3.32%, London fell 3.14%, Paris lost 2.39%, and Madrid had the smallest gap when retreating. 1.18%.
Pan-European Index Stokes 600, which includes 600 large, medium and small companies from 17 countries, fell by 2.31%. It was the seventh break in the last eight days.
Rate hikes continued today by the central banks of Switzerland and the UK. In London, the Bank of England raised rates for the fifth time since December. This time it is an increase of 0.25 percentage points, to 1.25%, with the bank warning of the possibility that “more active intervention” is needed in the near future, as inflation could reach 11% in October.
In Zurich, the Swiss National Bank surprised everyone by raising interest rates for the first time in 15 years. The institution opted for a 0.50 percentage point increase, which keeps the interest rate in negative territory (-0.25%), but takes it from the lows, contrary to the general forecast.
On the money market, the pound lost 0.3% against the dollar and 0.2% against the euro. On the other hand, the Swiss franc appreciated 1.66% against the euro, approaching parity.
These decisions are made the next day after US Federal Reserve announces rate hike interest rates by 0.75 percentage points (or 75 basis points), the largest increase since 1994. The European Central Bank promised a week ago increase by 25 basis points in July.
expectations induced global recession to “cool down” the economy, leave a negative ballast in the stock markets: Tokyo was the only Asian (and global) place to avoid an overall fall of about 3%.
with inflation at the highest level in recent decadesthese vigorous changes in interest rates scared the markets. index only Nikkei closed on a positive background (+0.4%). On the contrary, in China, both Hong Kong and Shanghai areas showed negative dynamics.
In the US around 7 pm on the Portuguese mainland (minus five hours on the US east coast), the S&P 500 lost 3.29%, nearing its lowest reading since December 2020. Since the beginning of the year, this Wall Street Top 500 index has already fallen by about 23% and is about to register its worst quarter since 2008, when the global financial crisis rocked the world.
The Dow Jones Industrial Average, on the other hand, fell 2.62%, while the Nasdaq tech index led the day in losses, falling 4.45%.
Companies such as Apple, Microsoft and Tesla were among those who registered the most significant stock market declines, which showed that investors would brace for an economic slowdown by dumping stocks of companies whose sales could be hit in a slowdown scenario. world trade.
