Asian shares gain as Fed says it will hold off on rate hikes

Combined Shape

BANGKOK (AP) — Shares were mostly lower in Europe on Thursday and headed for a lower open on Wall Street amid Brexit uncertainties and after the Federal Reserve promised not to raise interest rates this year.

Britain’s FTSE 100 added 0.3 percent to 7,311, while the DAX in Germany lost 0.9 percent to 11,496. The CAC 40 in France slipped almost 0.5 percent to 5,357.

Despite the Fed’s promise not to raise interest rates and reports from China that U.S. officials would visit Beijing next week for another round of trade talks, Wall Street looked set to open lower. The future contract for the Dow Jones Industrial Average was down 0.4 percent at 25,630 and that for the Standard & Poor’s 500 also shed 0.4 percent, to 2,2815.

British Prime Minister Theresa May was trying to persuade European Union leaders on Thursday to delay the United Kingdom’s departure from the bloc by up to three months just eight days before its scheduled split.

German Chancellor Angela Merkel said EU leaders are likely to grant Britain a short extension if the U.K. government can win parliamentary support next week for its divorce deal. But the early signs of that happening were not good. May angered many legislators in a televised speech late Wednesday blaming a divided Parliament for the impasse that has left Britain on the brink of crashing out of the bloc without a deal.

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Earlier, shares advanced across Asia after the Federal Reserve said it has ruled out interest rate increases for this year.

The Shanghai Composite index rose 0.9 percent to 3,119.72 while Hong Kong’s Hang Seng gained 0.2 percent to 29,371.12. South Korea’s Kospi climbed 0.5 percent to 2,187.71, while Australia’s S&P ASX was flat at 6,167.20.

Markets in Japan and India were closed for national holidays.

The Fed’s decision to put rate increases on hold is a marked change from three months ago, when the central bank projected two rate hikes in 2019. The move comes as Fed officials project that the U.S. economy will grow more slowly this year and in 2020, a change from the panel’s projections just three months ago.

“There is clear evidence the Fed are trying to get in front of the economic story and boost inflation expectations,” Chris Weston of IG said in a commentary.

CURRENCIES: The dollar dropped to 110.40 Japanese yen from 110.70 yen on Wednesday. It had been hovering above 111 yen. The euro dropped to $1.1396 from $1.1414.

ENERGY: Benchmark U.S. crude oil lost 39 cents to $59.84 per barrel in electronic trading on the New York Mercantile Exchange. News of tighter supplies of oil and continued production cuts helped to push the price above $60 per barrel overnight. Brent crude, used to price international oils, lost 28 cents to $68.22 per barrel.

The price of oil has been rising since Christmas Eve, when it hit a low of just over $42 per barrel. That followed a 44 percent plunge since October 3, when it hit a high of just over $76 per barrel.

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Ott reported from Madrid.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

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