World markets mostly rise on Fed rate plans
LONDON (AP) — Most world stock markets rose Thursday after the Federal Reserve signaled U.S. interest rates would remain at record lows. Wall Street, however, declined after making broad gains the day before.
Equity investors had been awaiting the Fed’s economic updates and statements by Chair Janet Yellen, who made clear that although the world’s largest economy was seeing a steadily improving job market and modest inflation, there was no need to raise short-term rates from record lows anytime soon.
In Europe, France’s CAC 40 rose 0.7 percent to close at 4,563.04, while Germany’s DAX gained the same rate to 10,004.00. The FTSE 100 index of leading British stocks added 0.4 percent to 6,808.11.
U.S. stocks failed to hold on to an early rise, after notching gains on Wednesday. The Dow edged down 0.2 percent to 16,876.82 and the broader S&P 500 shed 0.1 percent to 1,955.84.
“The Fed managed to navigate through what some had expected to be a potentially tricky announcement by providing further fuel for both equity and Treasury market bulls,” strategists at Rabobank said in a report.
Stan Shamu, market strategist at IG Markets in Melbourne, said, “With inflation picking up and unemployment falling, many investors out there were beginning to feel perhaps the Fed might be looking to raise rates sooner.”
Earlier, in Asia, Japan’s benchmark Nikkei 225 jumped 1.6 percent to end at 15,361.16 as the dollar slipped to 101.81 yen from 101.91 Wednesday. Australia’s S&P/ASX 200 also gained strongly, adding 1.6 percent to 5,468.20.
Hong Kong’s Hang Seng was little changed at 23,167.73 while South Korea’s Kospi edged up 0.1 percent to 1,992.03.
In mainland China, the Shanghai Composite Index lost 1.5 percent to 2,023.73.
In energy trading, benchmark crude oil for July delivery rose 1 cent to $105.98 in electronic trading on the New York Mercantile Exchange. The contract fell 39 cents on Wednesday.
The euro strengthened to $1.3620 from $1.3587 in late trading Wednesday.