AFP

Global stock markets rallied on Wednesday in volatile trading after a surprise intervention by the Bank of England pressured bond yields in Britain and the United States and lifted the pound.

The Dow snapped a six-day streak of losses, piling on nearly 550 points, or 1.9 percent after the BoE action.

Following a historic slump in the pound, the BoE announced it was temporarily buying up long-dated UK government bonds “to restore orderly market conditions.”

The “intervention helped calm markets and led to a reversal of a spike (in bond yields) that we had seen earlier this morning,” said Angelo Kourkafas of Edward Jones.

Analysts noted that stocks were poised for an upturn after a bruising stretch since mid-August that had pushed major indices to their lowest level of 2022.

Britain’s new Finance Minister Kwasi Kwarteng’s tax-cutting budget sent shock waves through markets, pushing the pound to a record low and leading to dire warnings for Britain’s economy — though sterling later rallied against the dollar.

The BoE intervention followed rare criticism from the International Monetary Fund, which argued that Britain’s recent budget could increase inequality and worsen inflation.

The pound, which had sunk to an all-time low against the dollar, jumped about 1.5 percent against the US currency.

“The dollar weakness was triggered by the BoE intervention today, as that gave rise to speculation that other central banks might step in to support their currencies and bonds,” City Index analyst Fawad Razaqzada told AFP.

After early losses, major indices in London, Frankfurt and Paris all closed up Wednesday.

But geopolitical concerns continued to temper enthusiasm, analysts said, with heightened Ukraine tensions and looming recession fears.

– Fear grips markets –

Analysts warned of looming risks in the shape of soft economic data and crumbling earnings expectations.

“Fear of tightening-induced recessions has wiped out the recovery we saw in stock markets over the bulk of the summer as investors were once again burned by an over-eagerness to catch the bottom in the market, despite there being little evidence of it being justified,” said OANDA’s Craig Erlam.

“That fear has now gripped the markets and we may see a little more caution going forward,” Erlam added.

Sentiment was also rattled by worries about developments in Ukraine, after Kremlin-installed authorities in four regions under Russian control claimed victory in annexation votes, with Moscow warning it could use nuclear weapons to defend the territories.

Ukraine and its allies have denounced the so-called referendums as a sham, saying the West would never recognize the results.

Volatile oil prices also rose Wednesday, as the European Union proposed a new round of sanctions on Moscow, including a possible oil price cap.

Leaks from two Russia-Germany undersea gas pipelines, which the EU said were caused by deliberate sabotage, also threatened to fuel further tensions in the energy conflict.

– Key figures at around 2050 GMT –

New York – Dow: UP 1.9 percent at 29,683.74 (close)

New York – S&P 500: UP 2.0 percent at 3,719.04 (close)

New York – Nasdaq: UP 2.1 percent at 11,051.64 (close)

London – FTSE 100: UP 0.3 percent at 7,005.39 points (close)

Frankfurt – DAX: UP 0.4 percent at 12,183.28 (close)

Paris – CAC 40: UP 0.2 percent at 5,765.01 (close)

EURO STOXX 50: UP 0.2 percent at 3d335.30 (close)

Tokyo – Nikkei 225: DOWN 1.5 percent at 26,173.98 (close)

Hong Kong – Hang Seng Index: DOWN 3.4 percent at 17,250.88 (close)

Shanghai – Composite: DOWN 1.6 percent at 3,045.07 (close)

Pound/dollar: UP at $1.0889 from $1.0733 on Tuesday

Euro/dollar: UP at $0.9735 from $0.9594

Euro/pound: FLAT at 89.39 pence 

Dollar/yen: DOWN at 144.11 yen from 144.80 yen

Brent North Sea crude: UP 3.5 percent at $89.32 per barrel

West Texas Intermediate: UP 4.6 percent at $82.15 per barrel

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Kremlin-backed officials in Ukraine appealed to President Vladimir Putin Wednesday to annex the regions under their control, after the territories held votes denounced by Kyiv and the West as a “sham”.

Ukraine called on the EU to hit Russia with more sanctions and NATO to send more weapons to the frontline after the Kremlin-installed officials rolled out the alleged results late Tuesday.

The appeal came despite repeated warnings from Moscow that it could use its nuclear arsenal to defend the territories from a Ukrainian counter-offensive that has wrested back swathes of territory this month already.

“Ukraine cannot and will not tolerate any attempts by Russia to seize any part of our land,” President Volodymyr Zelensky said.

The United States announced a new package of weapons and supplies Wednesday worth $1.1 billion, including precision rocket systems, ammunition, armoured vehicles and radars.

The European Commission proposed fresh sanctions targeting Russian exports worth seven billion euros, an oil price cap, an expanded travel blacklist and asset freezes.

The EU slammed the “illegal” vote and said the results were “falsified”, while the White House and German Chancellor Olaf Scholz said they would “never” recognise them.

British Prime Minister Liz Truss and her Canadian counterpart Justin Trudeau vowed to disregard the votes and offer Kyiv further support.

Lugansk was the first Russian-controlled region of Ukraine to appeal to Putin to intervene, with the recently captured southern regions of Zaporizhzhia and Kherson following shortly after.

“Our residents made a historic choice and have decided to become part of the multinational population of the Russian Federation,” the Kremlin-installed leader in Kherson, Vladimir Saldo, said in a statement published on social media.

The Russian foreign ministry in a statement on Wednesday said the regions made a “conscious and free choice” in favour of annexation.

Only Donetsk — which along with Lugansk makes up the industrial Donbas region partially controlled by pro-Kremlin separatists since 2014 — had yet to formally ask Putin for annexation.

The appeal to Putin represents a turning point in the seven-month invasion as Russian officials in Moscow suggest they could use nuclear weapons in Ukraine and Putin calls up thousands of reservists to cement the Kremlin’s authority in the territories.

– ‘What have we ended up with?’ –

The four territories — Kherson and Zaporizhzhia in the south; Donetsk and Lugansk in the east — create a crucial land corridor between Russia and the Crimean peninsula, annexed by Moscow in 2014. 

Together, all five make up around 20 percent of Ukraine, whose forces in recent weeks have been clawing back ground.

Despite those gains — particularly in the northeast — Russian forces have battered the second-largest city of Kharkiv and overnight a salvo of missiles hit a railway yard, knocking out power to more than 18,000 households.

Iryna Mayor, 51, a machine operator in the rail wagon workshop, paused from shifting rubble and laying damp and torn record books out to dry, to angrily mock the invasion.

“We’re Russian-speaking people, and what have we ended up with? Have we got peace, brotherhood? No, you can see what we got,” she declared, pointing at the twisted debris surrounding the missile craters.

Lawmakers are expected to vote hastily to annex the territories now that the results have been announced, and Russian news agencies have said Putin could sign legislation formalising the land grab this week.

– ‘I’m in shock’ –

Putin’s threat to use nuclear weapons in Ukraine coincided with his decision to call up hundreds of thousands of reservists to back up Russia’s struggling forces in eastern Ukraine.

The move has sparked panic, protests and an exodus among military-aged Russian men for neighbouring countries such as Georgia and Kazakhstan.

Moscow announced Wednesday it would no longer issue passports to Russian men called up to serve and a region bordering Russia closed to passenger cars, with both moves fuelling fears the borders could close entirely.

The same day, a Russian court remanded three young poets into custody for two months after they took part in an event against the mobilisation, the OVD-Info human rights NGO said.

At a military recruitment office in Saint Petersburg there was confusion and resignation, as draftees and their families bid each other goodbye.

Nikita, a 25-year-old reservist, had tears in his eyes as he held hands with his 22-year-old fiancee as he said goodbye.

“If you have to go, you have to,” he said. 

“I don’t know what to say. I am in shock,” Alina said, her gaze locked on Nikita.

Along the frontline of Ukraine, six people were injured in the Kharkiv region by Russian strikes, officials in Kyiv said, while five civilians were killed and 10 more wounded by Moscow’s forces. 

The White House announced Wednesday billions of dollars in pledges from major corporations — including the likes of fast food behemoth Burger King — to craft a national strategy on ending the twin US challenges of hunger and obesity.

The private sector pledges were unveiled as President Joe Biden hosted what the administration touted as the first big White House summit on food and diet since Richard Nixon was in office more than half a century ago.

Nearly 42 percent of American adults are technically obese and about 10 percent of US households suffer food insecurity, according to the latest government statistics.

Biden told the White House Conference on Hunger, Nutrition, and Health that government, Congress, private companies and society must work together to end hunger and reduce diet-related diseases in the United States by 2030.

“If you can’t feed your child, what the hell else matters?” he asked the audience of Congress members, activists, health experts and food industry representatives including top chef and humanitarian Jose Andres. “In America, no child should go to bed hungry. No parent should die of disease that can be prevented.”

Because Congress is unlikely to fund major federal dietary programs, Biden finds his hands largely tied. However, officials said he was using the power of the presidency to get major companies involved and that the response has been strong.

“We know that we can only achieve the goals… if we rally a whole of society response,” a senior official said, speaking on condition of anonymity.

Officials briefing reporters said that $8 billion in public and private sector commitments already made include pledges from more than 100 organizations, ranging from hospitals to tech companies and food industry players.

“All have committed to bold and in some cases, paradigm shifting commitments that will meaningfully improve nutrition, promote physical activity, and reduce hunger and diet related disease over the next seven years,” an official said.

– What’s ‘healthy’? –

The White House says that poor diets are behind ever-rising cases of diseases like type 2 diabetes, obesity, hypertension, and certain cancers, warning that “there is no silver bullet to address these complex issues, and there is no overnight fix.”

One idea being pushed by the administration is to regulate the use of the term “healthy” on food packaging.

“More than 80 percent of people in the US aren’t eating enough vegetables, fruit and dairy. And most people consume too much added sugars, saturated fat and sodium,” the US Food and Drug Administration said.

For now, the quickest response is coming from the private sector.

S2G investments, which champions “a more humane and healthy planet,” and food industry innovation specialists Food Systems for the Future are set to launch a $2.5 billion private investor coalition over the next three years.

The National Restaurant Association will expand a project aimed at getting children to eat healthier food at 45,000 more outlets, including at chains like Burger King.

IT and communications giant Cisco will contribute $500 million over five years for healthier meals and food production in areas where it does business.

Officials acknowledged that there is no enforcement mechanism for the spending programs but “we will continue to certainly work closely with these partners to ensure they execute on the actions committed to.”