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Markets returned to growth after the Fed steps back in interest rate hikes

Markets returned to growth after the Fed steps back in interest rate hikes with Wall Street and European market avoided bearish sentiment.

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The possibility for the delay in tightening of the monetary policy by Fed supported the global markets and Wall Street left correction territory, while Asian stocks ended mostly on a green.

The US Central Bank is planning to take a wait-and-see policy on raising key interest rates during its upcoming meeting. Under the new plan, the Fed may choose to discontinue regular quarterly increases in interest rates. This will change the trend in the last two years of a gradual increase in key interest rates on federal funds, which has sparked sharp criticism from the US President Donald Trump.

The investors continued to follow the events surrounding the Huawei Financial Director’s arrest by the Canadian authorities. It became clear that the detention of Chief Financial Officer Meng Wanzhou at the request of the United States was in the framework of the US investigation into an alleged scheme to use the global banking system against the sanctions against Iran.

At the same time, Japan intends to ban government deals with device and equipment deals by Chinese technology companies Huawei and ZTE Corp to raise its protection against the leak of confidential information and cyber attacks.

Huawei supplies network equipment to private Japanese telecoms NTT Docomo and KDDI Corp. SoftBank Group has a long-standing relationship with Huawei – which in 2011 became the first Chinese firm to join the Japanese conservative business lobby Keidanren – and has partnered with it in the field of 5G research.

Asian markets recap

The Japanese blue-chip index Nikkei 225 added 177.06 points, or 0.82%, to its value, ending the day at a level of 21,678.68 points. The shares of SoftBank declined by 2.09%.

On Chinese markets, the continental index Shanghai Composite rose by 0.03% to 2,605.89 points, while Hong Kong’s benchmark Hang Seng fell by 0.35% to 26,063.76 points.

In South Korea, the local index Kospi rose by 0.34% to 2,075.76 points.

Kospi index

The Australian S&P ASX 200 rose by 0.42% to 5,681.50 points, with almost all sectors ending with positive results. Stocks of the Big Four in the banking sector have risen. The Australian and New Zealand Banking Group and Commonwealth Bank of Australia grew by 0.16% and 1%, respectively. The shares of Westpac and National Australia Bank reported an increase of 0.23% and 0.25% respectively.

European stocks mid-session recap

German stocks are on the rise today with the turning point being the possible delay in the Fed’s interest rates hikes. The benchmark DAX 30 was up 95 points, or 0.9%, to 10,905.87 points at 11:00 GMT after plunging as much as 3.5 percent the previous day to enter the bearish market territory. The enterprise software vendor SAP rallied 2% after it announced free access for SAP partners to SAP Cloud Platform. The healthcare firm Fresenius plunged more than 10% after saying its ambitious Group targets for 2020 would not be met.

French stocks rebounded on Friday. The focus remained on a key US jobs report due tonight, with economists expecting employment to increase by 205,000 jobs in November after an increase of 250,000 jobs in October. The jobless rate is expected to hold at 3.7%. The benchmark CAC 40 was up 76.63 points, or 1.60%, to 4,857.08 points. The banks BNP Paribas and Credit Agricole were modestly higher. The automaker Renault was marginally lower. The Nikkei business daily reported that Tokyo prosecutors plan to indict former Nissan Motor Chairman Carlos Ghosn on December 10 for financial misconduct.

CAC 40 stocks

The British index FTSE 100 rose by 107.55% in mid0session on Friday to 6,811.60 points. The latest Halifax House Price Index showed that UK house prices in November fell 1.4% month-on-month and 1.1% quarter-on-quarter quarterly but increased by 0.3% year-on-year. The annual growth rate is the lowest since December 2012.

Wall Street pre-session recap

The US stock index futures were sharply in the red ahead of Friday’s open.

At around 6:00 AM ET, Dow futures slipped by 84 points, indicating a negative open of 135.67 points. Futures on the S&P 500 were pointing to a negative open of 15.00 points, while Nasdaq futures signaled the index will open 45.10 points lower.

On the data front, investors will be keeping a close watch on nonfarm payrolls, a key metric for Fed policy, due at 8.30 ET. At the same time, there will also be unemployment numbers.

In corporate news, the earnings calendar is thin, with only Vail Resorts due to report before the bell.