Asian stocks higher, tracking US gains on Fed assurance
MANILA, Philippines (AP) — Asian stocks were mostly higher Wednesday, tracking the climb of U.S. shares as investors welcomed the latest signal from the Federal Reserve that it will move slowly to raise interest rates. Tokyo's Nikkei 225, however, bucked the trend and was trading lower.
KEEPING SCORE: Tokyo's Nikkei 225 was down 1.2 percent to 16,906.47. Hong Kong's Hang Seng index surged 1.3 percent 20,625.65. China's Shanghai Composite was up 1.6 percent to 2,967.01. South Korea's KOSPI rose 0.3 percent to 2,000.20. Australia's S&P ASX 200 was up 0.1 percent to 5,010.30. Southeast Asian markets were up.
WALL STREET: U.S. stocks closed at their highest level of the year Tuesday as investors welcomed the latest signal from the Federal Reserve that it will move slowly to raise interest rates. Big names including Apple and Microsoft led technology stocks higher as the market made its biggest gain in two weeks. The Dow Jones industrial average rose 97.72 points, or 0.6 percent, to 17,633.11. The Standard & Poor's 500 index gained 17.96 points, or 0.9 percent, to 2,055.01. Aided by the gains in tech stocks and in small cap stocks, the Nasdaq composite index climbed 79.84 points, or 1.7 percent, to 4,846.62.
ASIA'S ECONOMY: Softer growth prospects for China and a weak recovery in major industrial economies are expected to push down economic growth in developing Asia to 5.7 percent in 2016 and 2017, below previous projections, according to an Asian Development Bank report released Wednesday. The region's economy grew 5.9 percent in 2015. The Asian Development Outlook 2016 said China's economic growth is seen moderating to 6.5 percent this year from 6.9 percent last year and to 6.3 percent next year. Slower exports, a falling labor supply and supply-side reforms are reshaping the world's second-largest economy toward more domestic consumption and a further reduction in excess industrial capacity, it said.
THE QUOTE: "The net effect of Fed statements over recent weeks has been to close the gap between market expectations and the Fed outlook," said Ric Spooner, chief market analyst at CMC Markets. "It's clear that the Fed is truly data dependent and so, like everybody else, does not know whether and when it will be raising rates again this year."
ENERGY: Benchmark U.S. crude gained 29 cents, rising to $38.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract shed $1.11, or 2.8 percent, to $38.28 a barrel on Tuesday. Brent crude, used to price international oils, was up 32 cents to $40.18 a barrel in London.
CURRENCIES: The dollar declined to 112.29 yen from 112.77. The euro rose to $1.1299 from $1.1287.