Asian stock markets held fairly steady Friday, holding on to gains in the week driven by US and Japanese central bank policy decisions that fueled investors’ belief that low rates will be around for a few more months.
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Real estate companies rose more than the rest of the market, with the newly created real estate component of the S&P 500 up 1.7 percent.
Eight of the 11 major S&P sectors were lower, with the energy index’s 1.23 percent fall leading the decliners.
The S&P 500 is up 1.5 percent for the week, after the Federal Reserve held off raising interest rates and scaled back the number of increases it expects in 2017.
The Fed will have three monthly government reports on the state of the USA labor market in hand before its meeting in December, when many traders and economists expect it to finally pull the trigger on a rate hike.
The financials group, which accounts for 35 percent of the index’s weight, slipped 0.5 percent overall.
“It’s another example of the issues facing investors right now, particularly pension funds and retirement funds, that they are all chasing yield in the same places”, said Ian Winer, co-head of equities trading at Wedbush Securities.
The Fed’s potential rate hike later this year is another reason the baht’s rise was muted, Mrs Chantavarn said. The data were not supportive of a rate hike…
The market is pricing in the prospect of a rate increase at the Fed’s next policy meeting on November 1-2 at 12%, while chances for a rate increase in December is slightly less than a coin toss at 48.3%, down from 51.9% the prior day, according to CME Group’s gauge of federal-fund futures contracts-a popular way for the market to bet on rate-hike expectations.
Fed officials said the labor market has continued to strengthen and growth of economic activity has picked up from where it was in the first half of the year.
Goldman Sachs said its USA economics team assigns a cumulative 65% probability to a rate hike by the 14 December FOMC meeting, which is roughly the same as implied by fed fund futures. The 10-year yield has stayed fairly consistent since early September, significantly above its August range of 1.725 percent to 1.75 percent. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.7 basis points to 1.615 percent. The contract rose 98 cents to settle at $46.32 a barrel on Thursday.
Energy companies followed oil prices higher. Murphy Oil rose 4.3 percent, and Transocean rose 5.6 percent.
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Other commodities were also rising, which helped out materials stocks. The UK’s FTSE 100 Index advanced 1.1 percent, while Germany’s DAX index and France’s CAC 40 index each rallied 2.3 percent. Copper miner Freeport-McMoRan rose 4 percent. The BOJ´s announcement initially sent the dollar up more than 1 percent to 102.79 yen, though the gains unravelled as investors realized that the overall market impact was far from obvious.
