U.S. rally gives world markets a boost
TOKYO - Global stocks were mostly higher Thursday, but Tokyo's market slumped over a U.S. Fed statement overnight that reversed the recent trend for a strong dollar, while other markets were cheered by a surge on Wall Street that followed.
France's CAC 40 rose 0.3 percent to 5,047.23 in early trading while Germany's DAX was up 0.4 percent at 11,965.35. Britain's FTSE 100 edged up 0.3 percent to 6,964.36. U.S. shares were set to open lower, with Dow and broader S&P 500 futures down 0.1 percent.
Japan's benchmark Nikkei 225 slipped 0.4 percent to 19,476.56. A weak yen has been a boon for the nation's giant exporters. South Korea's Kospi added 0.5 percent to 2,037.89 and Hong Kong's Hang Seng jumped 1.5 percent to 24,468.89. Other Asian bourses were also higher, including Taiwan, Singapore, Indonesia and the Philippines.
The statement from U.S. Federal Reserve Chair Janet Yellen took investors by surprise, and interest rates are now expected to head higher but at a slower pace than previously thought. That set off a rally on Wall Street Wednesday. The Fed has held its benchmark interest rate close to zero since 2008. Low rates make it easier for businesses and consumers to borrow and spend, but also tend to weaken that nation's currency.
"Yellen highlighted the strong dollar as one reason for slower exports," said Chang Wei Liang of Mizuho Bank in Singapore. "The big surprise yesterday was that the Fed acknowledged the negative impact stemming from the strong U.S. dollar."
A militant attack on a museum in Tunisia's capital set off some worries about global stability. It killed 19 people in the deadliest attack on civilians in the North African country in 13 years. Two gunmen were slain by security forces.
Benchmark U.S. crude sank $1.62 to $43.04 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, dipped 40 cents to $55.51 a barrel.
The dollar recovered slightly to 120.60 yen from 120.23 yen. The euro fell to $1.0671 from $1.0805.