Asian stock markets rally after Fed keeps monetary stimulus in place | iNFOnews | Thompson-Okanagan's News Source

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Asian stock markets rally after Fed keeps monetary stimulus in place

A man is reflected on the electronic stock board of a securities firm in Tokyo, Wednesday, Sept. 18, 2013. Asian stock markets struggled to find their footing Wednesday as traders hesitated to make bold moves before the Federal Reserve winds up a crucial policy meeting later in the day. (AP Photo/Shizuo Kambayashi)
September 18, 2013 - 8:17 PM

BANGKOK - Asian stock markets surged Thursday after the U.S. Federal Reserve unexpectedly refrained from reducing its massive economic stimulus.

Not even dour data out of Japan showing a swelling trade deficit could dampen the rally sparked by the Fed's decision to keep in place its $85 billion in monthly bond purchases, part of its "quantitative easing" approach of pumping money into the financial system to help stimulate the U.S. economy.

Investors had braced themselves for a slight reduction in monthly bond purchases. Instead, the Fed, at the end of its two-day policy meeting Wednesday, announced no timetable for winding down the stimulus and even threw in a note of caution: the U.S. still has not attained adequate levels of job and economic growth.

"Employment growth has been very weak ... Private sector GDP growth is slowing, not accelerating," analysts at DBS Bank Ltd. in Singapore said.

Investors ignored the Fed's cautious tone and instead cheered the retention of the stimulus program, which has helped bolster global stock markets.

The Nikkei 225 in Tokyo rose 1.3 per cent to 14,697.17. Hong Kong's Hang Seng advanced 1.7 per cent to 23,503.71. Australia's S&P/ASX 200 gained 1 per cent to 5,290.80. South Korea's Kospi was closed for a public holiday.

Following the Fed's announcement, Wall Street stocks hit record highs, and the price of gold had its biggest one-day jump in four years as traders anticipated that the Fed's decision might cause inflation.

Both the Dow Jones industrial average and the Standard & Poor's 500 surpassed their previous record highs set on Aug. 2. The Dow rose 1 per cent to close at 15,676.94. The S&P 500 jumped 1.2 per cent to 1,725.52. The Nasdaq composite rose 37.94 points, or 1 per cent, to 3,783.64.

Benchmark oil for October delivery was up 59 cents to $108.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.65, or 2.5 per cent, to close at $108.07 on Wednesday.

In currencies, the euro rose to $1.3531 from $1.3516 late Wednesday. The dollar rose to 98.31 yen from 98.12 yen.

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News from © The Associated Press, 2013
The Associated Press

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