The debt package was approved by the Bundestag, and as a result, tension in the DAX dissipated. This led to the German stock index closing Wednesday's trading session with an overall loss, ending 0.4 percent lower at 23,288 points. Additionally, the financial markets acted cautiously as they prepared for the Federal Reserve's interest rate decision. The Fed, however, did not announce any further rate cuts, meaning the rate pause continues. Yet, Jerome Powell announced a forecast of weaker economic growth. This, in turn, strengthens hopes for additional interest rate cuts in the coming months to stabilize both the labor market and inflation. Incidentally, this also benefits companies by enabling them to access cheap capital for investments.
Once again, the shares of Heidelberg Materials managed to secure a spot in the top 3 stocks. The company, which is particularly supported by infrastructure investments, has risen by over 50 percent in the past three months. With the state-financed infrastructure investment package, the stock is expected to continue appearing among the top performers in the near future.
Six-day winning streak in the British FTSE 100
The FTSE 100 has not yet reached a new all-time high, but it managed to extend its current winning streak to six consecutive trading days. On the day before the Bank of England's interest rate decision, the stock market was driven by oil companies Shell and BP, which emerged as the day’s winners. However, overall, investors and traders acted cautiously and respectfully ahead of potential market disruptions from the Bank of England’s decision. It is expected that there will be no change to the current interest rate level, but an economic downturn in the UK remains a possibility.
British pound breaks the 1.30 US dollar mark
Meanwhile, the British pound managed to climb above 1.30 US dollars. If the Bank of England does not adopt a more conservative stance than currently expected on Thursday, this trend is likely to continue. Consequently, further increases in the exchange rate could be anticipated.
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