Asian stocks gain after Fed keep US interest rates low
BEIJING (AP) — Asian stocks advanced Thursday after the U.S. Federal Reserve left interest rates near zero to support a struggling economy.
Benchmarks in Shanghai, Tokyo, Hong Kong and Seoul all gained.
Lower interest rates and investor optimism about a possible coronavirus vaccine have helped global markets recover most of this year’s losses. But analysts say the recovery might be too early to be supported by uncertain economic activity as infection numbers rise in the United States, Brazil and other countries.
On Wednesday, Fed Chairman Jerome Powell warned that rising U.S. cases, which have led some state governments to reimpose anti-disease measures, threaten the modest recovery from the pandemic.
The Fed said it would keep buying $120 billion of Treasury and mortgage bonds every month to encourage borrowing and spending, but Powell said Congress needs to take action. Legislators have yet to agree on aid after $600 in weekly unemployment benefits for millions of Americans run out this week.
“The current situation is all about money in consumer pockets, which is precisely why fiscal policy is so much more important,” Stephen Innes of AxiTrader Corp. said in a report.
The Nikkei 225 in Tokyo rose 0.1% to 22,413.40 and the Shanghai Composite Index was off 0.1% at 3,290.87.
The Hang Seng in Hong Kong gained 0.3% to 24,951.85 despite data showing the territory’s economy shrank by 9% in the quarter ending in June.
The Kospi in Seoul gained 0.2% to 2,267.53 and Sydney’s S&P-ASX 200 added 0.6% to 6,041.70. New Zealand advanced while Singapore and Jakarta retreated.
On Wednesday, the benchmark S&P 500 index rose 1.2% to 3,258.44 in its biggest daily increase in two weeks. The S&P 500, which was down 34% earlier, is back within 3.8% of its February record.
The Dow Jones Industrial Average rose 0.6% to 26,539.57. The Nasdaq composite added 1.4% to 10,542.94.
Also Thursday, Japan reported retail sales rose by a better-than-forecast 13.1% in June over the previous month.
That means retail sales in one of the world’s biggest markets were only 0.9% lower than in February before the crisis hit, Tom Learmouth of Capital Economics said in a report.
In the United States, some companies are reporting quarterly results that exceed forecasts, though they still are well below pre-virus levels.
Advanced Micro Devices rose 12.5% after it reported stronger profit than Wall Street expected. Starbucks gained 3.7% after it reported a loss that wasn’t as bad as analysts were expecting.
Eastman Kodak surged 318.1%, gaining for a second day after the company won a $765 million government loan to launch a new business unit making pharmaceutical components. Shares rose to $33.20 from $2.62 on Monday.
Amazon added 1.1% Wednesday, Apple rose 1.9%, Facebook gained 1.4% and the Class A shares of Alphabet, Google’s parent company, were up 1.3%.
Gold rose to $1,956.60 per ounce from Wednesday’s $1,953.40. It briefly touched $1,960 the previous day.
In energy markets, benchmark U.S. crude rose 2 cents to $41.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 23 cents on Wednesday to $41.27. Brent crude, used to price international oils, added 7 cents to $44.16 per barrel in London.
In currency dealings, the U.S. dollar was at 105.03 Japanese yen, up from 104.90 yen on Wednesday. The euro fell to $1.1783 from $1.1789.