GLOBL stock markets rose while the euro slid yesterday after the European Central Bank (ECB) signalled its latest interest rate hike could be its last.

The major stock indexes on Wall Street rose following positive economic data, while chip designer Arm saw its share price surge almost 25% on its trading debut in New York. 

The SoftBank-supported firm’s banner initial public offering left it with a market capitalisation of around US$65 (RM204) billion – well above its target.

Arm’s IPO netted SoftBank almost US$5 billion while leaving it with control over approximately 90% of the company.

“I want to keep as much as possible as long as possible,” SoftBank chief executive Masayoshi Son told CNBC yesterday.

“I’m a long-term believer,” he added.

The Dow Jones Industrial Average rose almost 1%, while the S&P 500 and the Nasdaq both increased. 

‘Reached the peak’?

In Frankfurt, the ECB opted for another interest rate hike of 0.25%age points on Thursday as it continues the fight against inflation, taking the closely-watched deposit rate to its highest level since the introduction of the euro in 1999.

The bank defied calls for a pause to take pressure off the faltering eurozone economy, even as it cut growth forecasts. 

In its updated forecast, the ECB now sees inflation falling to a near target level of 2.1% in 2025.

The central bank’s governing council said it “considers that the key ECB interest rates have reached levels” that over time should make a “substantial contribution” to returning inflation to its target level of 2%.

“This is a clear and deliberate signal to the market that the ECB thinks it is done for now and we have reached the peak in rates,” said Neil Wilson, chief market analyst at Finalto.

The euro traded lower against the dollar due to the “dovish hike,” he added. 

Eurozone stocks, which were trading lower beforehand, bounced higher. 

Other analysts were not so categorical that the ECB was done with hiking rates.

“A lingering pause is being signalled, but it’s a low-conviction pause,” said Mark Wall, chief European economist at Deutsche Bank Research.

“The ECB has retained the option to hike further if necessary,” he added.

London’s FTSE 100 gained 2% on rising commodity prices, including oil, and the falling pound.

Crude prices remain elevated, with some analysts warning they could soon return to more than US$100 per barrel.

Key figures around 2100 GMT

New York - Dow: UP 1.0% at 34,907.11 points (close)

New York - S&P 500: UP 0.8% at 4,505.10 (close)

New York - Nasdaq: UP 0.8% at 13,926.05 (close)

London - FTSE 100: UP 2.0% at 7,673.08 (close)

Frankfurt - DAX: UP 1.0% at 15,805.29 (close)

Paris - CAC 40: UP 1.2% at 7,308.67 (close)

Euro Stoxx 50: UP 1.3% at 4,279.75 (close)

Tokyo - Nikkei 225: UP 1.4% at 33,168.10 (close)

Hong Kong - Hang Seng Index: UP 0.2% at 18,047.92 (close)

Shanghai - Composite: UP 0.1% at 3,126.55 (close)

Euro/dollar: DOWN at US$1.0645 from US$1.0733 on Wednesday

Euro/pound: DOWN at 85.73 pence from 85.91 pence

Pound/dollar: DOWN at US$1.2409 from US$1.2490 

Dollar/yen: DOWN at  ¥147.46 from  ¥147.47

Brent North Sea crude: UP 2.0% at US$93.70 per barrel

West Texas Intermediate: UP 1.9% at US$90.16 per barrel – AFP, September 15, 2023.