Asian stocks mixed after Fed leaves rates unchanged
BEIJING (AP) — Chinese stocks held steady Thursday following this week's turbulence while other Asian markets were mixed after the U.S. Federal Reserve left interest rates unchanged at a record low.
KEEPING SCORE: The Shanghai Composite Index was little changed at 3,787.49 and Hong Kong's Hang Seng was off by just 0.1 percent at 24,607.28. Tokyo's Nikkei 225 gained 1.1 percent to 20,525.80 while Seoul's Kospi shed 0.5 percent to 2,027.29. Sydney's S&P/ASX 200 gained 0.7 percent to 5,666.40. Taiwan, Manila, Jakarta and New Zealand also gained, while Singapore and Malaysia fell.
CHINA'S GYRATIONS: The Shanghai benchmark suffered its biggest one-day drop in eight years on Monday when it plunged 8.5 percent despite government intervention to stem a slide in stock prices. The index fell further before rebounding 3.5 percent on Wednesday. Analysts say the volatility is a sign economic fundamentals cannot support stock prices at their current level. Other say even if the intervention restores confidence, markets are likely to face turbulence in coming weeks before prices settle down.
FED DECISION: Fed policymakers voted Wednesday to leave interest rates unchanged and gave no indication a rise was imminent. The Fed said the U.S. economy is improving but signaled that it wants to see further economic gains and higher inflation before raising rates. Many investors expect the Fed will still lift rates in September or December, but its statement gave no timing for the raise. Low interest rates have been good for stock investors, helping fuel a bull market that has lasted more than six years.
U.S EARNINGS: Stocks were boosted by a strong batch of corporate earnings. Gilead Sciences rose 2.3 percent after its profit jumped 23 percent, helped by its new hepatitis C medicine Harvoni. Northrop Grumman led defense companies higher after it posted a stronger-than-expected profit in the second quarter and raised its outlook for the year. Northrop's stock jumped 6.2 percent, its biggest one-day gain in at least five years.
WALL STREET: On Wednesday, the Dow Jones industrial average rose 121.12 points, or 0.7 percent, to 17,751.39. The Standard & Poor's 500 rose 15.32 points, or 0.7 percent, to 2,108.57 and the Nasdaq composite rose 22.53 points, or 0.4 percent, to 5,111.73.
ENERGY: Benchmark U.S. crude added 10 cents to $48.89 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped 81 cents to close at $48.79 on Wednesday. Brent crude, used to price international oils, gained 31 cents to $53.89 in London after rising 8 cents to $53.38 the previous session.
CURRENCIES: The dollar rose to 124.14 yen from Wednesday's 123.90 yen. The euro edged down to $1.0970 from the previous session's $1.0986.