Global stocks climb on signs US rate hike not imminent
Global stocks rose Thursday on indications that the U.S. Federal Reserve is in no hurry to raise interest rates.
KEEPING SCORE: France’s CAC 40 index rose 1.6 percent to 4,424 points and Germany’s DAX added 0.5 percent to 10,585. Britain’s FTSE 100 gained 0.1 percent to 6,862. On Wall Street, futures for the Dow Jones industrial average and the Standard & Poor’s 500 were unchanged.
FED MIXED SIGNALS: Notes of the Fed’s last policy meeting in July showed officials saying a rate increase might be warranted but gave no indication of timing. Some analysts had been expecting a stronger signal for a move in September. Low rates have pushed up stock prices and any change might cool investor enthusiasm.
ANALYST’S TAKE: “There is clearly strong disagreement within the Fed with regards to the timing of further rate hikes,” Angus Nicholson of IG said in a report. “Despite some members saying that an immediate hike is appropriate and some saying one would soon be warranted, the more cautious members of the Fed said that they would have ‘ample time’ to react to a rise in inflation. This does seem to be a noticeable change from the previous concern that the Fed may ‘overshoot’ the inflation target.”
ECONOMIC DATA: Japan’s exports and imports in July suffered their biggest one-day decline since the aftermath of the global crisis in 2009. Exports sank 14 percent from a year earlier while imports plunged 25 percent in a sign of weak domestic demand. The rise in the yen has made imports cheaper but Japanese goods more expensive for foreign customers, hurting the economy.
Meanwhile, U.K. data was more upbeat, with a surprise monthly rise of 1.4 percent in retail sales in July, despite the vote to leave the European Union. Analysts note sales were likely boosted by good weather and say they are likely to moderate in coming months amid uncertainty over the vote’s outcome.
ASIA’S DAY: Hong Kong’s Hang Seng rose 1 percent to 23,028.08 while the Shanghai Composite Index lost 0.2 percent to 3,104.11. Tokyo’s Nikkei 225 slid 1.5 percent to 16,486.01. Seoul’s Kospi added 0.9 percent to 2,017.94 and Sydney’s S&P-ASX 200 advanced 0.4 percent to 5,497.40. India’s Sensex rose 0.6 percent to 28,166.50 and benchmarks in Taiwan, Thailand and Indonesia also gained. Singapore and Malaysia declined.
ENERGY: Benchmark U.S. crude added 15 cents to $46.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract climbed 21 cents on Wednesday. Brent crude, used to price international oils, lost 16 cents to $49.69 in London. It jumped 62 cents the previous session.
CURRENCY: The dollar edged up to 100.27 yen from Wednesday’s 99.84 yen. The euro strengthened to $1.1328 from $1.1298.