World shares hit a 15-month high and the euro climbed on Thursday as the European Central Bank followed its U.S. counterpart, the Federal Reserve, and delivered another widely-expected interest rate increase.
The ECB’s hike was its ninth in a row, but with investors sensing that the most aggressive rise in world borrowing costs in the last 40 years is finally cresting, MSCI’s 47-country ACWI stocks index (.MIWD00000PUS) scaled its highest level since April last year having surged 30% since November.
Investors are now waiting for Christine Lagarde’s news conference at 1245 GMT, which like the message from the Fed’s Jerome Powell on Wednesday, is expected to signal it will now watch where inflation goes.
The post-ECB reaction was muted after what had been a strong morning rally. On Friday, there is also the Bank of Japan meeting, where speculation has risen that it could begin shifting too.
The pan-European STOXX 600 (.STOXX) index remained up 1.2%, Italian (.FTMIB) and Spanish (.IBEX) stocks had hit their highest levels since 2008 and 2020 respectively, while the euro trimmed gains to 0.2% from 0.5%. /FRX
Clémence Dachicourt, senior portfolio manager at Morningstar Investment Management said the quarter point move by the ECB, which had taken its key deposit rate to 3.75%, had come as no surprise.