Asia stocks jump, Fed refrains from stimulus cut
Updated: 2013-09-19 16:11
(Agencies)
|
|||||||||
BANGKOK - Asian stock markets surged Thursday after the US Federal Reserve unexpectedly refrained from reducing its massive economic stimulus.
Not even dour data out of Japan showing a swelling trade deficit could dampen the rally sparked by the Fed's decision to keep in place its $85 billion in monthly bond purchases, part of its "quantitative easing'' approach of pumping money into the financial system to help stimulate the US economy.
Investors had braced themselves for a slight reduction in monthly bond purchases. Instead, the Fed, at the end of its two-day policy meeting Wednesday, announced no timetable for winding down the stimulus and even threw in a note of caution: the US still has not attained adequate levels of job and economic growth.
"Employment growth has been very weak ... Private sector GDP growth is slowing, not accelerating,'' analysts at DBS Bank Ltd. in Singapore said. Investors ignored the Fed's cautious tone and instead cheered the retention of the stimulus program, which has helped bolster global stock markets.
The Nikkei 225 in Tokyo rose 1.4 percent to 14,701.68, even though government data showed a bigger-than-expected gap in trade. Imports, boosted by higher fuel costs, rose 16 percent from a year earlier to 6.74 trillion yen ($68.7 billion) while exports gained 14.7 percent to 5.78 trillion yen ($58.9 billion).
Australia's S&P/ASX 200 added 1 percent to 5,290.50. Benchmarks in Indonesia, Thailand and the Philippines all jumped by more than 3 percent. India and Singapore also posted solid gains. Markets in South Korea and mainland China were closed for public holidays.
Hong Kong's Hang Seng advanced 1.7 percent to 23,512.12. The benchmark index was led higher by blue chip property stocks, which rose on expectations that interest rates would remain low, said Linus Yip, strategist at First Shanghai Securities in Hong Kong.
The Hong Kong dollar is pegged to the US dollar, which also means that interest rates in Hong Kong track the US, according to Yip.
In its announcement, the Fed repeated that it plans to keep its key short-term interest rate near zero at least until unemployment falls to 6.5 percent from its current level of 7.3 percent.
"Interest rates may not go up so quickly. So for today, it is good for property,'' Yip said. Hong Kong-listed Sino Land Co. rose 5.9 percent. Henderson Land Development gained 4.7 percent. Following the Fed's announcement, Wall Street stocks hit record highs, and the price of gold had its biggest one-day jump in four years as traders anticipated that the Fed's decision might cause inflation.
Both the Dow Jones industrial average and the Standard & Poor's 500 surpassed their previous record highs set on Aug. 2. The Dow rose 1 percent to close at 15,676.94. The S&P 500 jumped 1.2 percent to 1,725.52. The Nasdaq composite rose 37.94 points, or 1 percent, to 3,783.64.
Benchmark oil for October delivery was up 48 cents to $108.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.65, or 2.5 percent, to close at $108.07 on Wednesday.
In currencies, the euro rose to $1.3528 from $1.3516 late Wednesday. The dollar rose to 98.36 yen from 98.12 yen.
- Tapestry of Chinese culture and a Harvard teen's feeling
- A simple but pure festival tradition
- Beijing's rabbit god returns
- It's the real deal: Class explains genuine vs fake
- An eclipse of the mooncake
- Australia's new government sworn in
- Occupy Wall Street marks its second anniversary
- Learning China through its food
Most Viewed
Editor's Picks
New energy solutions |
Xinjiang scores on the national stage at last |
Watchdog bites with no favor |
Happily ever after until the divorce |
Africa looks to the Orient for lessons |
Private push |
Today's Top News
Fed surprise: No pullback in bond purchases
Sanctions no solution to DPRK issue
A new tool to measure greenhouse gas is out
Gunman's mother apologizes
Godiva's chocolate mooncakes find favor in US
CNOOC makes trading debut in Toronto
China asked to help end Syrian conflict
Trade treaties trade spotlight
US Weekly
Geared to go |
The place to be |