BusinessAsian stocks were set for modest gains on Thursday after the Federal Reserve pledged to keep monetary policy and rates unchanged and projected a rapid jump in U.S. economic growth this year as the COVID-19 crisis eases.FILE PHOTO: A man walks past a stock quotation board at a brokerage in Tokyo, Japan February 26, 2021. REUTERS/Kim Kyung-Hoon
2related media assets (image or videos) available. Click to see the gallery.18 Mar 2021 07:35AMShare this contentBookmarkNEW YORK: Asian stocks were set for modest gains on Thursday after the Federal Reserve pledged to keep monetary policy and rates unchanged and projected a rapid jump in U.S. economic growth this year as the COVID-19 crisis eases.
Japan's Nikkei 225 futures added 0.12per cent, while Hong Kong's Hang Seng index futures rose 0.68per cent.AdvertisementAdvertisementAustralia's S&P/ASX 200 index, however, dipped 0.1per cent in early trading while E-mini futures for the S&P 500 rose 0.08per cent. headtopics.com
While inflation is expected to reach 2.4per cent this year, above the central bank's 2per cent target, Fed Chair Jerome Powell called it a temporary surge that will not change the Fed's pledge to keep its benchmark overnight interest rate near zero.
"If the Fed isn’t going to induce tightening, it’s very bullish for risky assets," said Teresa Kong, head of fixed income and portfolio manager at Matthews Asia."We should be seeing a mild rally in Asian assets and currencies."The Fed projected the U.S. economy will grow by 6.5per cent this year - the largest annual output growth since 1984 - thanks in part to massive federal fiscal stimulus and optimism around the success of coronavirus vaccines.
AdvertisementAdvertisement"It's sort of shocking ... that officially the United States government believes it will grow faster than the Chinese government believes it will grow this year," said Christopher Smart, chief global strategist at Barings Investment Institute in Boston, calling it a"head-turning moment for investors." The S&P 500 closed at a record high and the Dow Jones Industrial Average closed above 33,000 points for the first time on Wednesday, bolstered by the Fed’s strong economic forecast and Powell's comments that it is too early to discuss tapering-off measures. The Dow Jones Industrial Average rose 0.58per cent, while the S&P 500 gained 0.29per cent.
The Nasdaq Composite climbed 0.4per cent and remains down about 4per cent from its Feb. 12 record-high close.The pan-European STOXX 600 index lost 0.45per cent and MSCI's gauge of stocks across the globe gained 0.22per cent.Emerging market stocks lost 0.46per cent. headtopics.com
AdvertisementThe benchmark 10-year Treasury note US10YT=RR, last fell 4/32 in price to yield 1.6462per cent.The dollar index dropped 0.5per cent to 91.405 after the Fed comments. The euro rose 0.7per cent against the dollar to US$1.1978. Against the yen, the dollar fell 0.1per cent to 108.87 yen.
The Australian dollar rose 0.08per cent versus the greenback at US$0.780.Oil slipped for the fourth day on Wednesday, weighed down by rising U.S. crude inventories and by expectations of weaker demand in Europe, where the vaccine roll out is faltering. Brent crude settled 39 cents, or 0.6per cent lower, at US$68 a barrel, and U.S. West Texas Intermediate (WTI) crude dropped 20 cents, or 0.3per cent, to end at US$63.68.
(Reporting By Elizabeth Dilts Marshall; Editing by Sam Holmes) Read more: CNA »
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