Asian stock markets mostly post modest gains after Fed says ready to help economyBy AP
Wednesday, September 22, 2010
Asian stocks post modest gains after Fed meeting
BANGKOK — Asian stock markets posted modest gains in holiday-thinned trade Wednesday after the Federal Reserve expressed concern about the flailing U.S. economy and indicated it was ready to do more to help.
Oil prices hovered near $75 a barrel after a report showed U.S. supplies unexpectedly rose last week, a sign demand for crude may not be improving. The dollar weakened against both the euro and the yen.
The U.S. central bank said Tuesday it is concerned that inflation is below levels consistent with a healthy economy and indicated that it is ready to provide “additional accommodation” to support the recovery. That would mean more purchases of Treasurys or other kinds of debt, which would keep interest rates low and hopefully encourage borrowing.
But the impact of the Fed’s statement on Wall Street was short-lived. While the Dow ended slightly up, the Standard & Poor’s 500 index and the Nasdaq fell. Analysts said that some investors were losing faith in the ability of the Fed to revive the world’s No. 1 economy.
“The economy is still stuck in neutral and hardly growing at all. America is still looking for a magic formula to revive the economy, but the No. 1 problem is that America is too deeply in debt,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.
Some markets in Asia, though, had prospects for a brighter month. China’s traditional September shopping spree helped lift Hong Kong’s Hang Seng Index, which has rebounded nearly 8 percent so far in September after a melancholy August. The index was up 167.34 points, or 0.8 percent, to 22,169.93.
Australia’s S&P/ASX 200 added 0.5 percent to 4,638.30 and Singapore’s benchmark climbed 0.6 percent to 3,114.12.
“The market is back to basics. Corporate earnings gains indicate markets should go higher,” Lun said.
In Japan, the Nikkei 225 stock average was down 0.1 percent at 9,591.42 as the yen strengthened. The dollar was trading below the 85-yen line, which it had maintained since the government intervened in currency markets last week to stem the yen’s rise.
Exporters lost ground as a result, with Toyota Motor Corp. down 0.7 percent and Canon Inc. falling 0.8 percent. Bucking the trend was Panasonic Corp., which soared 3.3 percent after the Nikkei financial daily reported that the electronics giant had shelved plans to raise funds by issuing new shares.
Markets were closed for holidays in South Korea, mainland China and Taiwan.
U.S. stocks had a brief bump Tuesday following news that the Fed was ready to help the economy, but the gains faded late in the day after no big new measures were announced. The Dow rose 7.41, or 0.1 percent, to close at 10,761.03. But Standard & Poor’s 500 index slipped 2.93, or 0.3 percent, to 1,139.78, and the Nasdaq composite fell 6.48, also 0.3 percent, to 2,349.35.
Investors began selling dollars after the Fed statement. The dollar weakened against major currencies, falling to 84.88 yen from 85.01 yen in New York late Tuesday. The euro rose to $1.3294 from $1.3270.
Benchmark crude for November delivery was up 26 cents to $75.23 a barrel in electronic trading on the New York Mercantile Exchange.
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