“Considering the kind of move we’ve made, when you look at October it’s been a pretty positive month, so for us to dribble a few of that out is a whole lot better than retracing a move in two days, and that is what it going on”.
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The Federal Reserve begins its two-day meeting later Tuesday, with expectations growing that it will hold off hiking interest rates, with many tipping no increase until early next year.
Given a series of mixed USA economic data, and last week’s rate cuts by China and hints of further monetary policy stimulus from the European Central Bank, odds have fallen for liftoff at the central bank’s December meeting.
Persistent weakness in telecommunication stocks after disappointing quarterly earnings, selling in oil-related stocks and profit-booking in banking shares pulled the markets lower.
Apple shares initially rose after hours as it beat sales and profit forecasts, but they gave up those gains later as concerns crept in. South Korea’s Kospi index fell 0.2%, Singapore’s Straits Times Index dropped 1% and Taiwan’s Taiex Index slid 0.5%. The former two hit record highs, while Microsoft rose to a 15-year high.
The central bank opted to leave rates unchanged at its September meeting, making the question of “when” even more ambiguous. That weighed on the S&P ASX 200 index, which lost 0.3 percent.
3640 as investors considered the prospect of further monetary easing from the Bank of Japan at its meeting on Friday. The Dow Jones Industrial Average shed 0.2 percent, weighed by IBM’s 4 percent fall after the firm disclosed the SEC is conducting an investigation into its accounting treatment of certain transactions.
At the height of the global financial crisis in 2008 the Fed slashed interest rates to near zero to stimulate growth, and introduced an unprecedented bond-buying scheme that effectively kept long-term borrowing costs down.
However, Shanghai ended on a high, with defence and technology shares rallying on news that a U.S. warship had sailed close to artificial islands Beijing is building in disputed South China waters.
Gold was 0.4% higher at $1,171.00 a troy ounce.
“We have reached the penultimate decision of the year and despite the Fed’s constant insistence that rates should rise this year, the market is becoming increasingly confident that it won’t happen”, added Oanda analyst Craig Erlam.
“The Japanese economy is weaker than in August and there’s no sign of a rebound.
Markets are now expecting easing from the BOJ”, said Takeru Ogihara, chief strategist at Mizuho Trust Bank.
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Despite a recovery in global equity prices, oil prices were softer, pressured by ongoing oversupply worries.
