Global Stock Markets Fall as Rally Cools, Investors Eye US-China Talks

Major stock markets in Asia and Europe faced a downturn on Thursday as investors took a pause and cashed in on recent gains following positive US inflation data. The slowing US inflation has had a positive impact on equities worldwide, with traders now believing that there is no need for further interest rate hikes and even speculating about potential cuts next year. However, the rally has started to fade, despite Wall Street managing to extend its gains on Wednesday. Hong Kong, Tokyo, and Shanghai experienced declines, while London and Paris were down at the halfway stage. The focus has shifted from the Federal Reserve’s tightening process to the timing and pace of potential rate cuts. In addition, investors are closely following the US-China talks between President Joe Biden and President Xi Jinping, which have been described as constructive and productive. The long-standing tensions between the two global superpowers have had a significant impact on the markets. Finally, Burberry shares suffered a sharp decline after the luxury fashion house issued a warning about its future profits due to weakening global demand for high-end clothing.