HONG KONG (AP) – European markets opened higher yesterday while Asian shares ended mixed after the Federal Reserve (Fed) cut interest rates again to ease pressure on the United States (US) economy.
Germany’s DAX slipped 0.1 per cent to 19,362,32. In Paris, the CAC 40 edged 0.1 per cent lower to 7,417.13. Britain’s FTSE 100 also fell 0.1 per cent, to 8,132.48.
The futures for the S&P 500 and the Dow Jones Industrial Average were virtually unchanged.
Markets in Hong Kong and Shanghai fell as investors awaited much-anticipated steps by Beijing to rev up the slowing Chinese economy following a meeting of the legislature’s Standing Committee.
“If Beijing delivers, we might see a powerful rally ripple through the region as investors gear up for a fresh surge in market momentum,” Stephen Innes of SPI Asset Management said in a commentary.
Officials announced a CNY6 trillion (USD839 billion), three-year plan to help local governments refinance their many trillions of debt that has ballooned during the COVID-19 pandemic and a collapse of the property market.
Hong Kong’s Hang Seng erased early gains, falling 1.1 per cent to 20,728.19. The Shanghai Composite index dropped 0.5 per cent to 3,452.30.
Japan’s Nikkei 225 index gained 0.3 per cent to 39,500.37.
Shares in Japanese automaker Nissan Motor Corp plummeted six per cent yesterday after the company on Thursday announced that it will dismiss 9,000 workers and slash its global production capacity by 20 per cent due to falling sales and rising costs and inventory.
In South Korea, the Kospi shed 0.1 per cent to 2,561.15, while Australia’s S&P/ASX 200 gained 0.8 per cent to 8,295.10.
On Thursday, the S&P 500 climbed 0.7 per cent, adding to its surge from the day before following Donald Trump’s presidential victory. The Dow Jones Industrial Average was virtually unchanged, while the Nasdaq composite rallied 1.5 per cent.
The Fed’s announcement that it was easing its main interest rate by a quarter of a percentage point caused few ripples in the market because even the precise size of it was so well anticipated by investors.
The central bank began easing rates in September and indicated more cuts were likely to come, as it focuses more on keeping the job market humming after helping get inflation nearly down to its two per cent target. What’s less certain in the minds of investors now is how much Trump’s victory may upset the Fed’s plans.
Trump is pushing for tariffs and other policies that economists said could drive inflation higher, along with the economy’s growth. Traders have already begun paring forecasts for how many cuts to rates the Fed will deliver next year because of that. While lower rates can boost the economy, they can also give inflation more fuel.
For now, Fed Chair Jerome Powell said, nothing is changing.
“In the near term, the election will have no effects” on interest-rate policy, he said.
At this point, Powell said it’s still not clear what the policies will be after Trump returns to the White House. “We don’t guess, we don’t speculate and we don’t assume,” he said.
The yield on the 10-year Treasury bond eased to 4.33 per cent from 4.44 per cent late on Wednesday.
A report on Thursday showed slightly more US workers applied for unemployment benefits, though the number remains relatively low. A separate report suggested US workers improved their productivity during the summer, which can help keep a lid on inflation, but not by quite as much as economists expected.
In other dealings yesterday, US benchmark crude oil lost 89 cents to USD71.47 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, gave up 88 cents to USD74.75 per barrel.
The dollar fell to JPY152.61 from JPY152.94. The euro slipped to USD1.0770 from USD1.0804.
