Investors cheer jumbo rate cuts across most world markets
Several stock markets hit another round of record highs on Thursday
Dubai: Stock markets worldwide surged on Thursday after the US Federal Reserve announced a bumper interest-rate cut and pledged further reductions in the near term.
"Global markets had been on edge ahead of the Fed decision, but have seen a solid recovery in risk appetite thereafter," noted Chris Beauchamp, chief market analyst at online trading platform IG.
Wall Street stock markets opened at a new round of highs on Thursday for a second time after the first Fed cut in four years, a clear sign investors will stay upbeat on economic prospects for now.
Disregarding Bank of England's move against a second cut in as many months, London's FTSE jumped over 1 per cent, while Paris surged 1.8 per cent and Frankfurt won 1.3 per cent. Stocks markets in India hit a record high, while Tokyo closed up 2.1 percent, with Hong Kong not far behind.
Gulf investors cheer move
Key Gulf markets rose as central banks in the region mirrored the Fed move by cutting their key interest rates. Oil prices - a catalyst for the Gulf's financial markets - rose as a result too. Monetary policy in the GCC often aligns with the Fed's decisions as most regional currencies are pegged to the US dollar.
Saudi Arabia's benchmark index was the top regional gainer, rising 1.3 per cent, while the Qatari benchmark added 0.5 per cent. In the UAE, Dubai's main share index added 0.7 per cent, and the Abu Dhabi index rose 0.8 per cent higher.
It's not just investors, UAE residents with monthly paybacks on their loans and credit card bills are too eyeing immediate relief on borrowing costs being paid since March of 2022.
Analysts opine that borrowers will benefit from waiting for even better deals in November and December, as banks typically present their most competitive offers to kick off the new business year in January 2025.