Asian stocks were mostly higher on Tuesday after a Federal Reserve board member said she was in no hurry to raise interest rates, reassuring investors who were anxious that the rate hike could pull share prices lower.
Advertisement
The benchmark U.S. Treasury yield US10YT=RR turned higher midsession Monday and hit a session high of 1.697 percent, the highest since late June.
Markets in China will be closed on Thursday and Friday for the mid-Autumn festival.
In New York, the Dow Jones industrial average gained 191.82 points at 18,277.27, while the broader S&P 500 index climbed 25.81 points at 2,153.62.
All 10 S&P sectors finished higher, with telecoms (+2%), consumer staples (+1.9%), tech (+1.7%) and utilities (+1.7%) topping today’s leaderboard, while commodity sensitive materials (+1%) and energy (+0.9%) lagged. The Topix index of all first-section issues was up 0.47 percent, or 6.22 points, at 1,329.32.
“Rosengren’s comments were nothing new compared to remarks he’d made last month, but the fact they were repeated after the intervening USA data run marked them out as significant”, National Australia Bank said in a commentary. Retail giant Wal-Mart rose 84 cents, or 1.2 percent, to $71.14 and toothpaste maker Colgate-Palmolive gained 89 cents, or 1.3 percent, to $71.75.
Open Text Corp soared 7.8 per cent to $84.02 after the software company said it had agreed to buy Dell-EMC’s enterprise content division for $1.62 billion.
Asian stocks rebounded from a one-month low after dovish comments from Federal Reserve governor Lael Brainard triggered gains in U.S. shares and weighed on the dollar. “If we raise interest rates and if the dollar starts getting too strong, we’re going to have very major problems”. The losses Friday wiped out two months of gradual gains on the market. Both lent support to raising the Fed rate, with the former saying that higher rates were necessary to keep the USA economy from overheating.
In a speech earlier Monday, Dennis Lockhart, head of the Fed’s regional bank in Atlanta, said he still held the view he expressed last month at a Fed gathering at Jackson Hole, Wyoming: That economic conditions justified consideration of a rate hike in September.
She said on Monday the low interest rate policies across advanced economies could make the United States more vulnerable to spikes in the value of the dollar which could put downward pressure on inflation.
In corporate news, PotashCorp and Agrium announced an agreement to merge.
ENERGY: Oil futures extended losses.
Advertisement
Energy Transfer Pipeline fell 86 cents, or 2.2 percent, to $38.28. That helped take technology stocks higher. The contract fell $1.74, or 3.7 percent, to close at $45.88 a barrel on Friday.
