Asian stocks posted broad gains gain after Fed rate hike | business | Hindustan Times
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Asian stocks posted broad gains gain after Fed rate hike

business Updated: Dec 17, 2015 08:45 IST
Asian markets

A currency trader walks by the screen showing the foreign exchange rate between the US dollar and the South Korean won. Asian stocks posted broad gains on Thursday after the Federal Reserve ended protracted uncertainty in markets by raising interest rates for the first time in nearly a decade.(AP)

Asian stocks posted broad gains Thursday after the Federal Reserve ended protracted uncertainty in markets by raising interest rates for the first time in nearly a decade and signaling that further increases will be gradual.

Japan’s Nikkei 225 jumped 2.3% to 19,484.29 and Hong Kong’s Hang Seng rose 1% to 21,922.19. South Korea’s Kospi added 0.3% to 1,975.04. Australia’s S&P/ASX 200 advanced 1.7% to 5,115.20. China’s Shanghai Composite gained 0.9% to 3,548.98. Benchmarks in Taiwan, New Zealand and Southeast Asia also rose.

The Federal Reserve raised its main interest rate by a quarter of a point, a move that was widely anticipated in the markets. That rate had been near zero for seven years to foster an economic recovery after the US mortgage crisis that sparked a global recession. The rate hike was a long-expected vote of confidence in the US economy, which is world’s biggest and a crucial market for exporters in trade-reliant Asia. At the same time investors were encouraged that the Fed emphasized that further increases will be gradual.

The quote

The rate hike “signals confidence in the ongoing recovery in the US economy after the Great Financial Crisis,” said Shane Oliver, head of investment strategy at AMP Capital. “Given ongoing deflationary risks and slow global growth, future Fed hikes are likely to be cautious and gradual,” he said a report. “Global shares are likely to resume their rising trend but with US shares as a relative underperformer. Bond yields are likely to remain low which should be positive for real assets.”

Energy

Benchmark US crude was up 1 cent at $35.53 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.83, or 4.9%, to close at $35.52 in New York on Wednesday.

Brent crude, a benchmark for international oils, was down 12 cents at $37.27 a barrel in London. It lost $1.26, or 3.3%, to $37.19 in the previous session.

Currencies

The euro was little changed at $1.0847 from $1.0884 in the previous trading session. The dollar rose to 122.56 yen from 122.41 yen.