Asian stocks rose Wednesday after Wall Street edged higher on news the U.S. Federal Reserve is in no hurry to raise interest rates.
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The Australian dollar skidded 0.6 percent to $0.7640, down slightly for the week.
Minutes of the central bank’s last meeting were released this week and struck a more dovish tone than earlier comments by New York Fed President William Dudley, who had flagged the possibility of a tightening as soon as next month.
Oil prices were also helped by a falling dollar, which slipped to its lowest against a basket of major currencies since June 24 as traders marked down the odds of an interest rate increase by the Fed.
MSCI’s All World index climbed 0.26 percent to head back toward a one-year high, lifted by a 0.47 percent rise in Asian shares, their biggest gain since August 8.
Global equities received a lift this week after the Federal Reserve’s July policy meeting minutes showed that the USA central bank was in no hurry to hike interest rates.
A day later, minutes from the Fed’s July meeting, released on Wednesday, said that policy members wanted to keep “options open” but remained divided on the need for a near-term rate hike. Wal-Mart Stores Inc. and Chevron Corp. were the two best performers on the blue-chip gauge.
“The market has been Fed-driven so far, it is going through a phase where it will pivot from the Fed to more emphasis on companies growing their revenues”. Seoul’s Kospi added 0.9 percent to 2,017.94 and Sydney’s S&P-ASX 200 advanced 0.4 percent to 5,497.40.
Energy stocks provided the biggest sector boost.
Crude oil prices rocketed higher for the sixth session in the green as hopes over a production freeze from major oil-producing countries and a draw-down in domestic inventories continued to fuel commodities. It jumped 62 cents the previous session to $49.85. USA light crude oil was up about 3 percent at $48.21. “The rise in oil prices of late technically has bull characteristics”.
Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum in Algeria on September 26-28.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.46 percent to 957.78 tonnes on Wednesday. At the same time as the Philly Fed data, the U.S. Labor Department said initial jobless claims, for the week ending Aug 13, fell by 4,000 claims to 262,000, down from the previous week’s reading of 266,000 claims.
Benchmark 10-year Treasury notes rose 9/32 in price for a yield of 1.531 per cent.
According to the minutes, “Some participants viewed recent economic developments as indicating that labor market conditions were at or close to those consistent with maximum employment” suggesting that one of the Fed’s mandate is being met and May’s employment report was just an anomaly.
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Spot gold was up 0.2 percent at $1,350.47 an ounce at 1203 GMT, on track for a fourth straight day of gains.
