Economy

Wall Street closes higher after Fed policy statement

Wall Street closes higher after Fed policy statement”

"During QE, the important thing was the signaling effect - the Fed was going to come in and reflate the economy, provide stimulus and higher rates of growth, and dissuade people from owning Treasuries and force them into other markets", said Brian Nick, the chief investment strategist at TIAA.

USA stocks hit records as well, lifted by industrial and financial stocks.

Western Digital slipped 4.36 percent after Japan's embattled Toshiba said it agreed to sell its semiconductor business to a group led by USA private equity firm Bain Capital. "It could hurt financials and the overall market might not like the uncertainty", he added.

But after the solid day on the Australian market yesterday with the ASX 200 up 0.4% or 25 points, the overnight ASX futures market with a gain of only 7 points - meaning the start today will be more subdued than expected after the strong finish on Wall Street this morning.

USA stock benchmarks ended a volatile session mostly in the green, with the Dow industrials and the S&P 500 carving out fresh all-time highs, as the Federal Reserve announced that, for the first time in nine years, it would start reducing the size of its $4.5 trillion asset portfolio commencing in October. The stock was one of the biggest drags on the consumer discretionary index. MSCI's gauge of stocks across the globe shed 0.25 percent. Shares of smaller wireless carrier T-Mobile rose 5.9 percent and Sprint jumped 6.8 percent, following a report they were in active merger talks.

ASIA'S DAY: The Shanghai Composite Index gained 0.3 percent to 3,362.86 and Hong Kong's Hang Seng added 1.3 percent to 28,159.77.

US crude rose 1.5 percent to $50.65 per barrel and Brent was last at $55.86, up 1.75 percent on the day.

AUSTRALIA - The Australian and New Zealand dollars notched broad gains on Monday as rising bond yields at home sucked investor funds away from low-yielding currencies, notably the Japanese yen.

The U.S. central bank kept interest rates unchanged, as widely expected, but said it would start to shrink its balance sheet by $10 billion a month.

Gold hit a 2-1/2 week low on Monday as the dollar rose ahead of a two day Federal Reserve meeting and global equities surged.

Yellen emphasized, during the news conference, that the central bank was monitoring stubbornly low inflation closely, with an eye to seeing it return to its 2% annual target.

Benchmark U.S. Treasury yields jumped to their highest levels in six weeks. That marked the 42nd record-high this year for the Dow.

Oil prices were set for their largest third-quarter gain in 13 years, after the Iraqi oil minister said OPEC and its partners were considering extending or deepening supply cuts.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 1.1 percent to 2,805 ringgit ($669.93) a tonne at the end of the trading day, the first day of a new trading contract.



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