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European and US markets fall after Fed rate decision | European and US markets fall after Fed rate decision |
(about 1 hour later) | |
European and US markets have fallen following the Federal Reserve's decision on Thursday not to raise US interest rates. | European and US markets have fallen following the Federal Reserve's decision on Thursday not to raise US interest rates. |
The Fed had cited concerns about weakening global growth and recent stock market volatility. | The Fed had cited concerns about weakening global growth and recent stock market volatility. |
The FTSE 100 fell 1.34%, Frankfurt's Dax plunged 3.06%, and in Paris the Cac 40 dropped 2.56%. | |
On Wall Street, stocks were sharply lower, with the Dow Jones down nearly 1% in morning trading. | |
Brenda Kelly, head analyst at London Capital Group, said: "Markets have taken cues from the US, but uncertainty prevails and choppiness is the only certain result. Deflation is a concern. China is a concern, and oil prices look set to take another leg lower." | Brenda Kelly, head analyst at London Capital Group, said: "Markets have taken cues from the US, but uncertainty prevails and choppiness is the only certain result. Deflation is a concern. China is a concern, and oil prices look set to take another leg lower." |
Some analysts said the Fed could still raise rates this year. | Some analysts said the Fed could still raise rates this year. |
"The Fed's assessment of the global economic conditions has made investors nervous as uncertainty about the timing of a US rate hike continues. We think that a rate hike could still be announced in December," said Robert Parkes, equity strategist at HSBC. | "The Fed's assessment of the global economic conditions has made investors nervous as uncertainty about the timing of a US rate hike continues. We think that a rate hike could still be announced in December," said Robert Parkes, equity strategist at HSBC. |
But Michael Hewson, chief strategist at CMC Markets, said: "The Fed's rather downbeat outlook came as an unwelcome surprise, and it's likely to take a while for investors to figure out whether the Fed is seeing something that the rest of us aren't." | But Michael Hewson, chief strategist at CMC Markets, said: "The Fed's rather downbeat outlook came as an unwelcome surprise, and it's likely to take a while for investors to figure out whether the Fed is seeing something that the rest of us aren't." |
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