European stock markets opened slightly lower. Paris (-0.06%) and Frankfurt (-0.03%) were close to balance around 08:40 GMT, while London fell 0.45%. The European banking sector declined slightly.

The main index of the Tokyo Stock Exchange fell 0.17%, while Hong Kong jumped 2.34% and Shanghai 0.64%.

The U.S. Federal Reserve (Fed) decided to raise its key interest rate by only a quarter of a percentage point and signaled that it was considering only one more such hike in the short term, in a context undermined by the banking crisis.

The Fed's tone was perceived as dovish by observers as the institution now speaks conditionally of continuing its monetary tightening, a sign that rate hikes could slow down.

The dollar was hurt by the prospect of a smaller Fed rate hike this year. It lost 0.36% against the euro to 0.9179 euro to the dollar around 08:30 GMT and touched a low since early February.

These announcements initially delighted US investors before the trend reversed, the three indices of the New York Stock Exchange ended down about 1.6%.

For CMC Markets analyst Michael Hewson, it was comments from U.S. Treasury Secretary Janet Yellen that tipped the indices into the red.

"I have not considered or discussed any kind of comprehensive coverage, insurance or guarantee for all deposits," Yellen told U.S. senators.

After the bankruptcy of Silicon Valley Bank, the US authorities had taken steps to guarantee the withdrawal of all deposits from SVB and Signature Bank, while the traditional guarantee covers only $ 250,000 per customer and per bank.

Another element that cooled investors, Fed Chairman Jerome Powell said that "rate cuts are not part of our base case", contrary to what the markets had hoped.

Switzerland, England and Norway on the table

The Swiss central bank, which has worked to secure the purchase of Credit Suisse this weekend, raised its key interest rate by 0.5 basis points on Thursday to 1.5% without ruling out future rate hikes to ensure price stability.

And the Bank of Norway opted for an increase in its key rate of 0.25 points to 3%.

Later in the day, the Bank of England's (BoE) decision is expected. The BoE had signaled at its last meeting that it could keep its rate unchanged, at 4%, but inflation surprisingly rebounded to more than 10% in February and the economy held up better than expected.

"Given that inflation is not going to slow down on its own, it is almost certain that the Bank of England will raise its rate by 25 basis points at its meeting today," said Ipek Ozkardeskaya, an analyst at Swissquote Bank.

On the bond market, European government borrowing rates fell sharply around 08:30 GMT.

Tencent pulls Chinese tech

Global video game giant Tencent's profit fell 16 percent in 2022 but investors welcomed the fact that the group's revenue came in slightly above analysts' expectations.

Its shares jumped 8.18% in Hong Kong, pulling with it Meituan (+8.29%), Xiaomi (+7.19%) and Alibaba (+4.04%).

On the side of commodities and bitcoin

Oil prices were falling. The barrel of North Sea Brent for delivery in May lost 0.23% to $ 76.51, while the barrel of US WTI at the same maturity fell 0.54% to $ 70.51 around 08:30 GMT.

Bitcoin rose 1.03% to $27,670.

© 2023 AFP