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16 Mar 2022
Stocks Soar as China Promises Aid to Revive Run-Down Markets, Restoring Risk Sentiment
The Index Today
European stocks and U.S. futures surged on Wednesday, spurred by China’s assurance of providing fiscal stimulus to revive its run-down markets thereby restoring investor appetite of risk assets.
According to Bloomberg News, the Stoxx Europe 600 index surged by 2.3% as technology shares made up the lead with Prosus NV bouncing back by 20% after hitting a record low previously. The Nasdaq 100 and S&P 500 contracts rose by 1.8% and 1% respectively.
China also announced its plans to help improve fiscal markets to boost economic development, alleviating fears surrounding its harried real estate sector.
This comes ahead of the U.S. Federal Reserve’s monetary policy decision at 1800 GMT on Wednesday when it is expected to hike interest rates by 25 basis points to counter mounting inflation which hit a 40-year high recently. Lauren Goodman of New York Life Investments said, “We will be closely watching the Fed’s dot plot, which we expect to signal five or six interest-rate hikes this year, more than December’s projections but in line with market expectations.”