HONG KONG — World stocks shares were mixed Thursday as investors digested the latest statements from the Fed, which plans to raise rates again this year, and the Bank of Japan, which signalled it won’t tighten anytime soon.
KEEPING SCORE: European shares rose in early trading. France’s CAC 40 added 0.4 per cent to 5,262.35 and Germany’s DAX climbed 0.2 per cent to 12,590.05. Britain’s FTSE 100 edged up 0.1 per cent to 7,279.01. Wall Street was poised to open lower. Dow futures slipped 0.1 per cent to 22,361.00 and broader S&P 500 futures dipped 0.1 per cent to 2,502.90.
FED IN FOCUS: At their latest meeting, Federal Reserve policymakers kept short-term interest rates unchanged but said they still expect one more increase this year and three in 2018, if persistently low inflation rebounds. Since December 2015, the Fed has modestly raised the rate four times. Rates had previously been cut to a record low after the 2008 financial crisis, helping to fuel a multiyear global stock boom. Officials also said they plan to start unwinding the U.S. central bank’s $4.5 trillion balance sheet next month by reducing its bond holdings, which will gradually increase long-term borrowing rates. The plans were mostly in line with economist expectations.
INVESTOR INSIGHT: “The relatively hawkish statement and unchanged interest rates projections for 2017 and 2018 have forced market participants to adjust their expectations for an interest rate hike in December 2017, from a chance of 50 per cent to above 70 per cent,” said Sayed Hussain, chief market strategist at FXTM.
JAPAN ON HOLD: Officials at Japan’s central bank, meanwhile, made no changes to monetary policy, leaving in place stimulus measures to prop up Asia’s No. 2 economy. The decision, which was widely expected, was approved in an 8-1 vote, with one new board member unexpectedly dissenting, saying the measures weren’t aggressive enough.
ASIA’S DAY: Japan’s benchmark Nikkei 225 added 0.2 per cent to close at 20,347.48 as the yen weakened against the dollar, benefiting shares of exporters. But other regional indexes wavered, with South Korea’s Kospi slipping 0.2 per cent to 2,406.50. Hong Kong’s Hang Seng index slipped 0.1 per cent to 28,110.33 and the Shanghai Composite in mainland China lost 0.2 per cent to 3,357.81. Australia’s S&P/ASX 200 fell 0.9 per cent to 5,660.40. Taiwan’s benchmark rose and Southeast Asian indexes were mostly lower.
CURRENCIES: The dollar rallied to a nearly two-month high of 112.27 yen from 112.23 yen on Wednesday. The euro rose to $1.1917 from $1.1892.
ENERGY: Oil futures snapped their rally. Benchmark U.S. crude shed 30 cents to $50.39 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents, or 1.9 per cent, to settle at $50.41 a barrel on Wednesday. Brent crude, used to price international oils, lost 22 cents to $56.07 a barrel in London.
