ECB to join rate hike club and eyes bigger move in September
It is not just the US Federal Reserve now, it is also the European Central Bank (ECB), which will not just end quantitative easing (QE) and start hiking rates but it will be aggressive as well.
US and European shares fell on Thursday after the European Central Bank (ECB) said it would not just end quantitative easing (QE) and start hiking rates but will also follow it up by a potentially larger move in September. Pending inflation data spooked investors as well.
Quantitative easing is a monetary policy strategy where a central bank purchases securities in an attempt to reduce interest rates, increase the supply of money and drive more lending to consumers and businesses.
European markets began Thursday's session in the red after the ECB signaled a higher interest rate hike in September as it raised its inflation forecast and cut economic growth expectations for the year. The pan-European Stoxx 600 index was down 1.2 percent at the last count.
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On Wall Street, the Dow Jones Industrial Average fell 1.94 percent, the S&P 500 lost 2.38 percent and the Nasdaq Composite dropped 2.75 percent. Asian stocks fell overnight. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5 percent.
Indian equity benchmarks rebounded on Thursday led by a fag-end recovery in oil & gas, financial, IT and FMCG pockets, following four back-to-back sessions of losses. The Nifty50 returned above the 16,400 mark decisively after a day's gap — a level where most analysts see strong near-term support.
Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details.
First Published: Jun 10, 2022 9:21 AM IST
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