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Wall Street higher as FTSE closes in the red amid Bank of England interest rates hike fears

London, UK FTSE
The FTSE 100 finished in the red ahead of next week's key interest rate decisions. Photo: Getty

The FTSE 100 and European stocks finished this Thursday's session mixed amid investor jitters about the global economic outlook and China's shift away from strict Covid restrictions.

The FTSE 100 (^FTSE) lost 0.20% to close at 7,474 points, while the CAC (^FCHI) in Paris closed flat at 6,658 points. In Germany, the DAX (^GDAXI) gained 0.11% to 14,277.

Prudential (PRU.L) was the biggest riser on the blue-chip index, up 1%, as JP Morgan said it believes the European insurance sector will continue to outperform in 2023.

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Frasers Group (FRAS.L) was the biggest faller at 9.44%, despite reporting surging sales driven by its acquisitions of brands like Missguided, amid the gloomy outlook for consumer spending.

Markets struggled as investors await next week's key interest rate decisions from the US Federal Reserve, the Bank of England and the European Central Bank.

The Bank of England looks set to raise interest rates to 3.5% or more next week, a 50 basis point increase, according to a Reuters poll.

The Bank of England has raised interest rates to 3% (Yahoo News UK/Flourish)
The Bank of England has raised interest rates to 3% (Yahoo News UK/Flourish)

"Interest rate hikes might cool inflation, but the reality is they’ll also cool just about everything else." said Danni Hewson, AJ Bell financial analyst. "The question that’s been circling investors’ minds is how hard will the landing be and how long will it take for economies to get back on their feet?”

Read more: Bank of England set to raise interest rates to 3.5%

On Wall Street, stocks were higher following a recent selloff where investors struggled to grasp a clear direction as they weighed how the Federal Reserve's monetary policy tightening might feed through into corporate America.

The Dow Jones (^DJI) rose 0.63% to 33,809. The S&P 500 (^GSPC) climbed 0.64% to 3,958 points and the tech-heavy Nasdaq (^IXIC) gained 0.94% to 11,061.

Meanwhile, Brent crude (BZ=F) has retreated to $76/barrel, slumping once again to near the lowest levels so far this year.

In Asia, Tokyo’s Nikkei 225 (^N225) lost 0.40% to finish at 27,574 while the Hang Seng (^HSI) in Hong Kong jumped 3.38% to 19,450. The Shanghai Composite (000001.SS) closed flat at 3,197 points.

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