Economy

Global stocks flat as investors await Fed meeting results

Global stocks flat as investors await Fed meeting results”

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.05 percent.

The Nikkei 225 index rose 1.96%, or 389.88 points, to end at 20,299.38, its highest since August 2015. The Hang Seng Index slid 0.27% while gains on the mainland were subdued.

The Japan share market closed at the highest closing level in over two years on Tuesday, 19 September 2017, bolstered by record highs on Wall Street overnight ahead of a Federal Reserve meeting, dollar's strength against the yen, and the prospect of a snap election in Japan.

The Fed stuck to its rate hike projections for another increase this year and three more in 2018, and said it will start dialling back its US$4.5 trillion stockpile of assets in what's reported to be a decade-long programme trimming the balance sheet by US$10 billion a month.

Tokyo was following Wall Street higher, as United States stocks logged fresh records in advance of this week's meeting of the Federal Reserve, which is expected to announce a drawdown of its massive bond holdings.

"There's some concern among investors as to how this will work, and how it will affect long-term rates". France's CAC gained 0.1 per cent to 5,244.17.

South Korea's KOSPI was down 0.05 percent and the won (KRW=KFTC ) was up 0.2 percent at 1,128.6 to the dollar. China's Shanghai Composite Index added 0.1 percent to 3,359.74. While shrinking the Fed's balance sheet is much expected, when and how the Fed will manipulate its target for short-term interest rates is less clear.

Stocks attracted hefty purchases from the outset Tuesday, thanks to the yen's drop and the Dow Jones industrial average's fifth straight rise Monday, brokers said. It has gained 0.3 percent on the week.

"The anticipated announcement of the start of balance sheet normalisation and the likelihood of the Fed keeping the option of a December rate hike alive has been the catalyst for last night's Dollars move", traders at HiFX said in a note.

Brent crude was up 0.1 percent at $56.50 a barrel after reaching a five-month high of $56.53 overnight.

The Aussie was hurt after Reserve Bank of Australia Governor Philip Lowe said on Thursday that the central bank does not have to follow a general move globally to raise interest rates. On Monday, the two benchmark US indexes extended gains, albeit modestly, to close at record highs.

In late NY trading, the euro rose to $1.1998 from $1.1950 in the previous session, and the British pound gained to $1.3523 from $1.3489 in the previous session, Xinhua news agency reported. It rose 2 cents to $49.91 a barrel on the New York Mercantile Exchange. The euro was steady at $1.1945, sandwiched between support at $1.1836 and resistance at $1.2092. Brent crude, used to price worldwide oils, gained 24 cents to $55.38 per barrel in London.

Japan's Nikkei share average rose to 2-1/2 month highs on Tuesday as investor confidence was boosted by a weakening yen and strong US shares, lifting cyclical stocks such as exporters and financial companies.



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