Global Factors Influencing the Market on 04 November 2022

Most Australian shares are trading lower following a drop in Wall Street yesterday. By 12:30 PM, 8 out of 11 indices are trading lower along with benchmark index ASX 200. Energy is the best performing sector, gaining +1.60% and +3.17% for the past five days.

On that note, let us look at some of the global factors influencing factors are:

1. Major US indices ended lower in the previous session. NASDAQ Composite, NASDAQ 100, Dow Industrial, S&P 500, Russell 200 slipped 1.73%, 1.98%, 0.46%, 1.06% and 0.53% respectively.
2. Market has reacted to Fed comments yesterday. Investors and strategist are now increasing their expectations for how much Fed will increase the interest rate to lower the inflation.
3.  World equities fall, U.S. Treasury yields rise after hawkish Fed. Market sentiment is bearish after Fed increased rate by 75 basis points.
4. US Fed indicates further interest rate hike in the coming period to combat rising inflation.
5. Oil prices slips, extending losses from the previous session as fears that the US interest rate will increase further. Also, the new COVID-19 cases in China are impact the demand in China.
6. Bank of England warned that Bank of England has entered recession.
7.  Bank of England has raised interest rate by 75 basis points to 3%. Bank of England expects that the UK economy might shrink for next year and a half as regional energy crisis aggravates home grown problems.
8. US Fed comments impacted the gold prices as well.

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