World stocks fell on Thursday and bonds resumed their slide after a surprise Swiss interest rate hike fuelled concerns about surging inflation and an aggressive policy tightening outlook from global central banks.
The Swiss National Bank raised its policy rate for the first time in 15 years with a 50 basis point hike that soured the mood and sent the safe-haven franc up sharply.
Hours later, the Bank of England delivered a more cautious 25 bps rate hike, a day after the European Central Bank promised support to temper a bond market rout fuelled by hawkish expectations
The MSCI's benchmark for global stocks (.MIWD00000PUS) fell 0.4% by 1158 GMT. The initial positive reaction to the widely expected 75 basis point (bps) rate hike by the U.S. Federal Reserve also fizzled out.
The pan-European STOXX 600 (.STOXX) fell to its lowest since February 2021, down 2.4%, S&P 500 and Nasdaq e-mini futures slid 2.2% and 2.6% respectively, pointing to a reversal of the previous session's rally.
"There's a lot of nervousness. After the initial relief to the Fed ... markets seem to have woken up that it is still a 75 basis point rate hike," Giuseppe Sersale, strategist and portfolio manager at Anthilia in Milan.
"If even the Swiss central bank surprisingly raises by half a point, clearly investors imagine that the tightening of central banks is still very violent. There is very little to be cheerful about," he added.
While Swiss stocks (.SSMI) were close to confirming a bear market pattern, the UK's top FTSE 100 (.FTSE) equity benchmark briefly came off lows as sterling plunged following the BoE's rate hike, which confounded some forecasts of a bigger move.