Sept 22 US stocks marched higher on Thursday, with the Nasdaq hitting a record intraday high, as investors cheered the Federal Reserve’s decision to not raise interest rates.
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Turning to USA markets, the Dow Jones industrial average and S&P were each up 0.6 percent, while the dollar softened 0.4 percent to $1.1228 against the euro.
The pan-European STOXX 600 index rose for a second straight session and was up 0.7 percent by 0748 GMT after touching its highest level in two weeks.
Janet Yellen’s Federal Reserve has demonstrated one of the core tenets of central banking: On the Fed panel that sets interest rates, some votes are more equal than others.
The Fed said it could hike rates by year-end as the labour market improved further, but scaled back the number of rate increases expected in 2017 and 2018.
The Fed’s decision to keep rates low also caused bond prices to rise and the USA dollar to fall against other major currencies, which in turn helped boost prices of commodities, which are denominated in dollars.
Financial markets responded positively to the news with the broad-based Topix index up by 2.5 percent and Nikkei rising by 1.8 percent. A declining dollar and a drawdown in USA crude inventories helped boost the oil market ahead of a meeting of major oil producers.
France’s CAC 40 rose 1.5 per cent in early trading to 4,410.55 and Germany’s DAX added 1.1 per cent to 10,556.92.
“In July, the Fed statement acknowledged that “near-term risks to the economic outlook have diminished” but omitted, as had all previous statements this year, any language on the balance of risks”, Mr Clarida said. Brent crude, used to price Global oils, rose 33 cents to $47.16 in London.
Deutsche Asset Management’s chief global economist, Joshua Feinman, said although the Fed believes the case for a rate-hike has strengthened and the bank sees a 70% chance of a December hike, his team thinks Wall Street is reacting to the central bank’s “tendency to under-deliver”.
Gold is heading for its biggest weekly advance since July after the Federal Reserve not only declined to raise USA interest rates this week but ratcheted down the odds on many more rises ahead. Diamond Offshore rose 3 percent. Hong Kong’s Hang Seng edged up 0.1 percent to 23,776.37 and the Shanghai Composite Index in mainland China dipped 0.2 percent 3,037.46.
The Treasury 30-year yield was little changed at 2.33 percent as of 10:32 a.m. London time, according to Bloomberg Bond Trader data.
Apple rose 0.9 percent to $114.56 after Nomura and RBC raised their price targets. In other energy commodities, heating oil rose 2.5 cents to $1.45 a gallon, wholesale gasoline rose less than 1 cent to $1.40 a gallon and natural gas fell 7 cents to $2.99 per 1,000 cubic feet.
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The Fed decision also lent pressure on the dollar, which retreated further Thursday against the euro and most other leading currencies.
