Asian shares mixed after Fed rate announcement
HONG KONG—Asian markets were mixed on Thursday, with confidence following the US Federal Reserve’s decision to hold interest rates at “exceptionally low levels” for at least two years offset by profit-taking.
The euro was also up after the US central bank move, despite Greece’s ongoing struggle to agree a writedown on its huge debts with its creditors.
Hong Kong, which was returning after a three-day holiday for Lunar New Year, jumped 1.63 percent, or 328.77 points, to 20,439.14 and Seoul was 0.25 percent higher, adding 4.95 points to close at 1,957.18.
Singapore closed up 0.10 percent, or 2.79 points, at 2,894.43 but Tokyo fell 0.39 percent, or 34.22 points, to 8,849.47, while
Sydney, Shanghai, Mumbai and Taipei were closed for public holidays.
Markets have been on a generally upward arc since the beginning of the year as the US economy shows tentative signs of recovery while officials in Europe strive to solve their debt crisis.
“We may get a continuation of the rally after news from the US last night that rates will be kept low,” said Carey Wong, an analyst at OCBC in Singapore. “People are focusing more on the US than Europe at the moment,” Wong told Dow Jones Newswires.
The Fed’s policy-setting committee said it would keep its key federal funds interest rate low through at least 2014, extending a prior timeframe of mid-2013, after cutting its growth forecast for this year.
It said it expected the economy to expand 2.2-2.7 percent, about one-quarter percentage point below the previous forecasts. For 2013, it sees growth edging up to 2.8-3.2 percent, and then accelerating to above 3.3 percent in 2014.
The announcement came despite an upturn late last year, with the bank saying ongoing economic weaknesses and strains in global financial markets mandated continued easy-money policies.
Fed chairman Ben Bernanke said the economy needed more time to ensure stable growth, citing “headwinds coming from Europe.”
Investors on Wall Street welcomed the decision. The Dow rose 0.66 percent to an eight-month high and the broad-based S&P 500 advanced 0.87 percent, while the tech-rich Nasdaq jumped 1.14 percent after Apple’s record-breaking earnings report on Tuesday.
The euro bought $1.3134 and 102.03 yen in early European trade Thursday, from $1.3103 and 101.94 yen in New York Wednesday afternoon.
The dollar bought 77.60 yen, compared with 77.80 yen in New York.
New York’s main contract, West Texas Intermediate crude for delivery in March, gained $1.25 to $100.65 a barrel.
Brent North Sea crude for March delivery was up 83 cents to $110.64.
Gold was at $1,708.05 an ounce at 0940 GMT, against $1,660.65 late Wednesday.
In other markets:
— Manila slipped 1.26 percent, or 58.81 points, to 4,611.68.
Philippine Long Distance Telephone was down 4.5 percent at 2,652 pesos, Metropolitan Bank & Trust fell 0.9 percent to 76.50 pesos and property developer Megaworld was down 4.0 percent at 1.70 pesos.
— Wellington ended flat, edging up 1.57 points to 3,281.68.
Air New Zealand added 1.69 percent to NZ$0.90, Contact Energy was 0.21 percent lower at NZ$4.76 and Fletcher Building added 0.79 percent to close at NZ$6.40.
— Jakarta gained 0.50 percent, or 19.83 points, to 3,983.43.
Car maker Astra International gained 0.5 percent to 78,350 rupiah, while state lender Bank Rakyat Indonesia was up 0.7 percent to 7,000 rupiah.
— Kuala Lumpur added 0.27 percent, or 4.10 points, to 1,523.86.
Hong Leong financial group climbed 3.0 percent to 12.26 ringgit while logistics firm MISC rose 1.5 percent to 5.99 ringgit and plantations giant Sime Darby slid 0.1 percent to 9.08 ringgit.
— Bangkok rose 1.19 percent, or 12.53 points, to 1,068.54.
