Milan, Nov. 15 (BNA): World shares extended gains on Wednesday and the dollar nursed its losses, as expectations of an end to a global rate hike cycle spurred on investors following benign inflation readings in the United States and Britain.
The MSCI world equity index, which tracks shares in 49 countries, rose 0.5% to its highest since mid-September, following a positive start in Europe and a rally across Asia, aided by a report of stimulus in China, Reuters reported.
The pan-European STOXX 600 index rose 0.8% after data showed British inflation cooled more than forecast in October, hitting sterling and reinforcing bets the Bank of England will be cutting interest rates by the middle of next year.
“This sends a clear sign that the Bank’s aggressive interest rate hikes are paying off, albeit slowly and at the expense of subdued economic activity,” said Jeremy Batstone-Carr, at strategist at Raymond James.
“With the laggard impact of interest rates still to be felt, economic activity will likely remain weak in the months to come, leading to incremental eases on price pressures,” he added.
The British consumer price index rose by 4.6% in the 12 months to October, slowing from September’s 6.7% increase, according to the Office for National Statistics,Reuters reported.
On Tuesday, data showed U.S. headline consumer prices were flat in October, against expectations for a 0.1% rise. Core CPI, at 0.2%, also came in below a forecast of 0.3%.
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