News

World stocks mostly rise as investors expect Fed to keep rates on hold, eye stimulus elsewhere

HONG KONG – World stocks mostly rose Wednesday as investors expected the Federal Reserve to hold off raising interest rates at its policy meeting. Expectations for more stimulus in Japan and the Swedish central bank’s decision to step up its monetary support program helped buoy sentiment.

KEEPING SCORE: France’s CAC was up 0.5 per cent to 4,871.46 and Germany’s DAX gained 0.8 per cent to 10,773.93. Britain’s FTSE 100 rose 0.4 per cent to 6,391.13. U.S. stocks were poised to rise, with Dow and S&P 500 futures each up 0.2 per cent.

RATE DEBATE: Investors were holding off from piling into stocks as they await the Fed’s latest interest rate decision due at the end of its two-day meeting. Expectations that the Fed will raise rates this year have diminished amid concern about a slower U.S. recovery. However, many investors also would prefer to see uncertainty resolved over when rates will be lifted. In contrast, hopes are rising that the Bank of Japan will expand its monetary stimulus when it holds its policy Friday, while Sweden increased the size of its bond-buying program on Wednesday.

US GROWTH: The U.S. economy has resembled a dizzying roller-coaster ride this year, with a hurtling dive followed by a steep climb leading to yet another slide. On Thursday, when the government issues its first of three estimates of growth in the July-September quarter, it’s expected to show an economy slumping from global weakness and reduced corporate stockpiling.

ANALYST INSIGHT: “It is very unlikely that the Federal Open Market Committee would have contemplated a hike,” analysts at Societe Generale said in a research note. “More critically, officials will have to decide whether they still consider a December rate hike as likely and, if so, come up with a game plan to prepare the markets.”

ASIAN SCORECARD: Japan’s Nikkei 225 rose 0.7 per cent to close at 18,903.02 while South Korea’s Kospi slipped 0.1 per cent to 2,042.51. Hong Kong’s Hang Seng shed 0.8 per cent to 22,956.57 and the Shanghai Composite Index in mainland China retreated 1.7 per cent to 3,375.20. Australia’s S&P/ASX 200 fell 0.2 per cent to 5,335.20. Benchmarks in Taiwan and Southeast Asia also fell.

ENERGY: U.S. benchmark crude rose 31 cents to $43.51 in electronic trading on the New York Mercantile Exchange. The contract fell 78 cents to close at $43.20 in New York on Thursday.

CURRENCIES: The dollar edged up to 120.45 yen from 120.43 on Thursday. The euro rose to $1.1063 from $1.1039.