World markets boosted by central banks’ suggestion rates to stay low for some time

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Central banks give world markets a boost

LONDON — World stock markets rose Wednesday after the U.S. and Japanese central banks indicated they were in no hurry to start raising borrowing costs and concerns about the Greek debt crisis subsided.

The rebound in Asia followed through into the European open with the FTSE 100 index of leading British shares up 23.15 points, or 0.4 percent, at 5,643.58, while Germany’s DAX rose 41.14 points, or 0.7 percent, to 6,012.13. The CAC-40 in France was 19.55 points, or 0.5 percent, higher at 3,958.50.

Wall Street was also poised to advance modestly at the open — Dow futures were up 15 points, or 0.1 percent, at 10,639 while the broader Standard & Poor’s 500 futures rose 1.4 points, or 0.1 percent, to 1,156.20.

Sentiment around the world was buoyed by expectations that the U.S. Federal Reserve will not be raising interest rates anytime soon. In its statement following its rate-setting meeting, the Fed repeated its comment that super-low interest rates were merited for “an extended period” even though it painted a more optimistic assessment of the U.S. economy — it noted that the labor market was “stabilizing” and that business spending was rising “significantly.”

“With cheap and easy cash on tap for the foreseeable future and a pretty decent bill of health for the world’s largest economy, it has been no surprise to see markets rally,” said Anthony Grech, market strategist at IG Index.

Sentiment in the markets also continued to be buoyed by the news that the Standard & Poor’s credit ratings agency gave its cautious backing to the Greek government’s attempts to get a grip on its borrowing by taking the country off so-called credit watch. That means the agency is not thinking about downgrading the country’s BBB+ credit rating at the moment, to the relief of the Greek government as it tries to plug its deficit by tapping the international bond markets for cash.

In the wake of the Bank of Japan announcement, Tokyo’s Nikkei 225 stock average rose 125.27 points, or 1.2 percent, to 10,846.98. Elsewhere in Asia, Hong Kong’s market jumped 361.56 points, or 1.7 percent, to 21,384.49 and South Korea’s Kospi was higher by 34.85, or 2.1 percent, at 1,682.86.

“Greece may have pulled itself clear of an imminent crisis but it still faces many tests ahead included the rolling over of around €20 billion worth of debt this spring,” said Jane Foley, research director at Forex.com.

The British pound was the big gainer Wednesday, rising 0.5 percent to $1.5325 in the wake of the Fed’s statement and figures showing a surprise fall in unemployment.

The euro remained near recent highs in the wake of the Standard & Poor’s news — by early afternoon London time it was flat at $1.3766, having earlier struck a near six-week high of $1.3817.

Greece’s debt problems have not disappeared overnight, and the government still has a number of hurdles to clear before it fully convinces the markets that it has a solid handle on the situation.

“Greece may have pulled itself clear of an imminent crisis but it still faces many tests ahead included the rolling over of around euro20 billion worth of debt this spring,” said Jane Foley, research director at Forex.com.

“From here until the general election, sterling will particularly vulnerable to political news suggest scope for further volatility over the coming months,” said Forex.com’s Foley.

However, concerns that the upcoming general election, which many expect to be held May 6, may not yield a clear winner to deal with Britain’s own debt problems remain.

“From here until the general election, sterling will particularly vulnerable to political news suggest scope for further volatility over the coming months,” said Forex.com’s Foley.

Meanwhile, oil prices rose further amid talk that the OPEC oil cartel will keep production unchanged — benchmark crude for April delivery was up 57 cents at $82.27.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.