Asian stock markets powered higher Thursday, sweeping aside worries about a flagging global economy after the U.S. Federal Reserve said it would remain “patient” in its approach to raising interest rates.
KEEPING SCORE: Japan’s Nikkei 225 surged 2.3 per cent to 17,210.05 and Hong Kong’s Hang Seng added 1.1 per cent to 22,829.86. Australia’s S&P/ASX 200 rose 1 per cent to 5,210.80. Markets in Taiwan and Southeast Asia also gained. China’s Shanghai Composite added 0.4 per cent to 3,072.71. Seoul’s Kospi was down 0.1 per cent at 1,897.50.
FED SPEAK: The world’s most powerful central bank is edging closer to raising interest rates from record lows given a strengthening U.S. economy. But it will be “patient” in deciding when to do so. That was the message sent Wednesday as the Fed ended a meeting amid heightened expectation about a forthcoming rate increase. At a news conference, Chair Janet Yellen said she foresaw no rate hike in the first quarter of 2015.
THE QUOTE: “It was always important for the Fed to get the language right so as not to spook markets at such a fragile time and it seems it has done just that,” said Stan Shamu, market strategist at IG in Melbourne, Australia.
RUBLE RUCTIONS: Russia also remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 per cent of its value this year as the oil price slump and Western sanctions over Russia’s actions in Ukraine hit the Russian economy. After falling again Wednesday, the ruble recovered somewhat and was at 59.50 to the dollar.
WALL STREET: Stocks rose as oil prices showed signs of stabilizing from a big slump and the market’s gains were extended after the Fed’s statement. The Standard & Poor’s 500 rose 40.15 points, or 2.04 per cent, to close at 2,012.89. That was the biggest gain for the index since October 2013. The Dow Jones industrial average gained 288 points, or 1.7 per cent, to 17,356.87. The Nasdaq composite climbed 96.48 points, or 2.1 per cent, to 4,644.31.
ENERGY: Benchmark U.S. crude was down 12 cents at $56.35 a barrel in electronic trading on the New York Mercantile Exchange. In Wednesday’s Nymex floor trading, it closed up 54 cents to $56.47 a barrel. Oil has been on a wild downhill ride since June when it was over $100 a barrel. Overproduction and weak demand are behind the fall in global oil prices. Brent crude, a benchmark for international oils, jumped $1.35 to $61.36 a barrel.
CURRENCIES. The euro rose to $1.2337 from the previous day’s closing level of $1.2329. The dollar fell to 118.57 yen from 118.83 yen.