San Francisco Frontiers - Stock markets rally as traders see end to Fed rate hikes

The Fed as expected raised borrowing costs once more on Wednesday as it seeks to bring inflation down further, while analysts are forecasting it will pause going forward.

European Central Bank policymakers looked set to deliver another interest rate increase of their own Thursday with eurozone consumer prices still rising fast.

"Just like their peers on the other side of the pond, the ECB are expected to provide another 25-basis point hike," noted Joshua Mahony, chief market analyst at Scope Markets.

"Ultimately, eurozone inflation remains a more significant problem than their US counterparts, and thus it is likely that (ECB chief Christine) Lagarde will keep the door open to further hikes if necessary."

Fed boss Jerome Powell did leave the door open for another US increase in September but added that any decision would be data-dependent.

Analysts said that with a healthy run of indicators in recent months, there was hope that more than a year of US rate hikes may have finally come to an end.

Powell also said he was optimistic that the world's top economy could dodge a recession, a situation many had bet on earlier in the year.

Friday sees the Bank of Japan decide over its monetary policy.

Investors are also keeping an eye on China after it announced plans to provide support to key parts of the world's second-biggest economy, particularly the struggling property sector, after a string of weak data showing the post-Covid recovery had run out of steam.

On the corporate front, traders continued to assess earnings, with Facebook parent Meta beating market expectations.

Samsung Electronics posted plunging profits on weak demand for memory chips, while energy majors including Shell and TotalEnergies also revealed heavy earnings falls after oil and gas prices retreated.

- Key figures around 1100 GMT -

London - FTSE 100: UP 0.2 percent at 7,695.11 points

Frankfurt - DAX: UP 1.0 percent at 16,284.77

Paris - CAC 40: UP 1.4 percent at 7,416.58

EURO STOXX 50: UP 1.4 percent at 4,406.60

Tokyo - Nikkei 225: UP 0.7 percent at 32,891.16 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 19,639.11 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,216.67 (close)

New York - Dow: UP 0.2 percent at 35,520.12 (close)

Euro/dollar: UP at $1.1137 from $1.1089 on Wednesday

Pound/dollar: UP at $1.2951 from $1.2943

Euro/pound: UP at 85.99 pence from 85.65 pence

Dollar/yen: DOWN at 140.26 yen from 140.34 yen

Brent North Sea crude: UP 0.8 percent at $83.57 per barrel

West Texas Intermediate: UP 0.9 percent at $79.45 per barrel

P.Adams--SFF