GLOBAL MARKETS DJIA 34092.96 6.92 0.02% Nasdaq 11816.32 231.77 2.00% S&P 500 4119.21 42.61 1.05% FTSE 100 7761.11 -10.59 -0.14% Nikkei Stock 27424.27 77.39 0.28% Hang Seng 22216.87 144.69 0.66% Kospi 2462.56 12.76 0.52% SGX Nifty* 17578.00 -122.0 -0.69% *Feb contract USD/JPY 128.55-56 -0.30% Range 128.97 128.18 EUR/USD 1.1018-21 +0.26% Range 1.1036 1.0987 CBOT Wheat March $7.596 per bushel Spot Gold $1,955.97/oz 0.3% Nymex Crude (NY) $76.83 -$2.04 US STOCKS
U.S. stocks jumped, erasing earlier losses, after the Federal Reserve said it had approved raising interest rates by a quarter of a percentage point.
Markets' afternoon rally showed just how confident many investors have become that the Fed will end up lowering interest rates this year.
The S&P 500 closed up 1%. The Nasdaq Composite Index advanced 2% and the Dow Jones Industrial Average lagged behind its peers, gaining less than 0.1%. Stocks wiped out losses from the morning. All but one of the 11 sectors of the S&P 500 ended higher.
"For everybody, there is a level of data dependency. It's telling us what to expect for the coming weeks or months from the central banks," said Seema Shah, chief global strategist at Principal Asset Management. "Our focus is still on inflation and the labor market and what that means for the Fed."
ASIAN STOCKS
Japanese stocks were higher in morning trade, led by gains in electronics and tech stocks, after the Fed slowed its pace of tightening. The newest 10-year Japanese government bond yield was down 1 basis point at 0.470%. Earnings were in focus. Mitsubishi Electric, Sony Group and Mitsubishi UFJ Financial Group are set to announce their results later in the day. The Nikkei Stock Average was up 0.2% at 27404.87.
South Korea's benchmark Kospi rose 1.1% to 2475.84 in early trade, led by gains in tech and internet stocks. Wall Street's tech-driven rally overnight after the Fed slowed its pace of interest rate increases buoyed investor sentiment. The won was stronger versus the U.S. dollar on renewed risk appetite, with USD/KRW 0.9% lower at 1,220.00.
Hong Kong stocks were higher in morning trade, following overnight gains on Wall Street, as investors expected easing interest-rate increases by the Fed in the coming months. The benchmark Hang Seng Index gained 0.9% to 22276.23. A wide range of sectors advanced. Analysts at Industrial Securities International reckoned the market may face some volatility and pullback in the coming weeks after a strong bullish run since late 2022, as investors look to lock in profit before China's earnings season. The brokerage's technical analysis also suggests rising downward pressure and more uncertainties for the HSI in the near term, they added.
Chinese shares were higher in early trade, tracking Wall Street gains overnight after the U.S. Fed raised interest rates by a quarter of a percentage point. Investors are increasingly confident that the Fed will start lowering interest rates later this year. Chip makers and software companies were leading the gains. ?The Shanghai Composite Index was up 0.2% at 3291.78, while the Shenzhen Composite Index and the ChiNext Price Index were also each 0.2% higher.
FOREX
Asian currencies strengthened against the USD in the morning session amid risk appetite spurred by signs of a potential Fed pause. Fed Chair Powell said the "disinflation process" in the U.S. has started, said Alvin T. Tan, head of Asia forex strategy at RBC Capital Markets, in an email. While there was some speculation before the FOMC decision that the Fed would push a hawkish message, what happened was very different as the Fed seemed to be getting comfortable with the impending pause to its tightening cycle, Tan added. USD/JPY fell 0.3% to 128.58, USD/KRW dropped 0.4% to 1,216.92 while AUD/USD edged 0.1% higher to 0.7145.
METALS
Gold was higher in early Asian trade, following broad gains in global stocks and commodities after Fed Chairman Powell acknowledged that interest-rate increases had begun to pull inflation lower, raising hopes for slower rate rises ahead. Gold could continue oscillating in the near term, as investors weigh the future direction of global central banks, Galaxy Futures analysts saed in a note. The precious metal has rallied since late 2022 on expectations of easing interest rate increases, which typically increases investor demand for gold. Recent stronger-than-expected macroeconomic data from the U.S. and Europe may mean that central banks would maintain their hawkish stance for longer, the analysts said and advised against chasing any upturns too aggressively. Spot gold was up 0.3% at $1,955.97/oz.
OIL SUMMARY
Oil prices were higher in early Asian trade, in line with the broad strength in global commodities markets after the Fed's chair said in remarks overnight that interest-rate increases have started to cool down inflation. While easing rate-hike expectations have been driving up a host of commodities prices, analysts at Galaxy Futures advised caution. They expect oil to continue experiencing volatility in the near term. While China's domestic oil demand is set to rebound, a mixed bag of factors such as rising geopolitical tensions and a potential global recession heighten uncertainty for oil prices, the analysts said. Front-month WTI futures advanced 0.7% to $76.97/bbl; front-month Brent rose 0.6% to $83.37/bbl.
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(END) Dow Jones Newswires
02-01-23 2215ET
