European stock markets closed higher Wednesday on renewed hopes for progress in talks between Russia and Ukraine and as global markets await the latest monetary policy figures and economic forecasts from the U.S. Federal Reserve. The pan-European Stoxx 600 index provisionally closed up around 3%, with major bourses and almost all sectors up. Technology stocks rose more than 6.5% and led the gains, while utilities bucked the trend, falling 0.8%.
U.S. stocks advanced in a wild session after the Federal Reserve raised interest rates and announced it would raise rates six more times this year. The Fed announced at the end of its two-day meeting Wednesday that it will raise short-term interest rates by a quarter percentage point, a well-prepared move by the central bank to control rising inflation. But it was the central bank’s outlook that somewhat surprised traders and initially pushed the market lower. The Fed’s consensus forecast was for a 1.9% key interest rate by the end of the year, which would mean a hike at each of the remaining central bank meetings this year.
Stocks in the Asia-Pacific region rose this morning after gaining overnight on Wall Street as the U.S. Federal Reserve announced its first rate hike in more than three years. Hong Kong’s Hang Seng Index led gains in the region’s major markets, rising nearly 5% in early trading, erasing sharp losses from earlier in the week. The benchmark index enjoyed its best day since October 2008 on Wednesday, rising 9%.
KFC owner Yum sees sales slump as Covid-19 cases rise in China
The owner of KFC and Pizza Hut announced that sales slumped 20% in the first two weeks of March as a wave of new covid cases spread through China. Yum China said that “the situation has deteriorated rapidly” as regional closures were imposed to contain the outbreak. More than 1,100 of its stores are temporarily closed or offering takeaway products and sales “continue to decline.” The closures in China are among the largest since the pandemic began. Yum China said, “The situation deteriorated rapidly in early March as the highly transmissible Omicron variant caused outbreaks across China, including the economically important regions of Guangdong, Shanghai, Shandong and Jilin.” Toyota, Volkswagen and iPhone maker Foxconn were forced to close their operations in the affected regions due to lockdowns.
SAP to repay South Africa at least $17 million over ‘invalid’ deals
The software company, headquartered in Germany SAP, will repay the South African Water and Sewerage Authority at least 263 million rand ($17.5 million) for licensing and support contracts that were declared invalid, a court order shows. Investigators have been probing SAP ‘s work for the department for several years, alleging that procurement rules were violated and contracts illegally entered into. The Special Investigating Unit (SIU) and the Department of Water and Sanitation (DWS) said in a statement that the SIU confronted SAP and the DWS with evidence of wrongdoing in licensing and support contracts between 2015 and 2016.