Global stocks are mixed as markets digest Fed moves
Global stocks mostly rose on Friday, as investors digested the US Federal Reserve’s latest message about raising short-term interest rates by the end of 2023.
The French CAC 40 gained nearly 0.2% at the start of the session to 6,677.20, while the German DAX lost 0.3% to 15,684.53. The UK FTSE 100 lost 0.4% to 7,123.80. US stocks were expected to start slowly, with Dow futures falling less than 0.1% to 33,684.0. The S&P 500 futures contract was virtually unchanged at 4,211.88.
Japan’s benchmark Nikkei 225 lost its earlier gains and slipped 0.2% to close at 28,964.08. South Korea’s Kospi rose 0.1% to 3,267.93. The Australian S & P / ASX 200 rose 0.1% to 7,368.90. The Hong Kong Hang Seng jumped 0.9% to 28,801.27, while the Shanghai Composite fell less than 0.1% to 3,525.10.
The Bank of Japan kept its ultra-lax monetary policy intact, as investors had expected. At the end of a two-day meeting, the central bank also extended for six months, until March 2022, a loan program to help businesses weather the pandemic.
âThe Japanese economy has picked up as a trend, although it has remained in dire straits due to the impact of COVID-19 at home and abroad,â the Bank of Japan said in a statement.
The Fed’s comments came on Wednesday, and global markets had already initially reacted on Thursday. But comments about the possibility of slowing down the central bank’s bond buying program are spilling over into the markets. Such support has been one of the main reasons for the stock market’s resurgence to record highs.
The first step the Fed is likely to take would be a slowdown in its $ 120 billion monthly bond purchases, which help keep mortgages low, but the Fed chairman said such reduction was probably still “very long term”.
Any easing of Fed aid to the economy would be a big change for markets, which feasted on easy terms after the central bank cut short-term rates to zero and put other programs in place. emergency.
The economy has started to explode out of a coma as more widespread vaccinations help the world get closer to normal. At the same time, soaring commodity prices are forcing companies across the economy to raise their own prices for customers, from fast food restaurants to used cars.
In energy trading, benchmark US crude fell 47 cents to $ 70.57 a barrel in electronic trading on the New York Mercantile Exchange. It fell from $ 1.11 to $ 71.04 a barrel on Thursday. Brent crude, the international standard, fell 58 cents to $ 72.50 a barrel.
In currency trading, the US dollar fell to 110.14 Japanese yen from 110.23 yen. The euro fell from $ 1.1908 to $ 1.1916.