Asian stocks rise strongly as investors count down to Fed
HONG KONG — Asian stocks surged Wednesday ahead of a widely expected decision by the Fed to raise interest rates from near zero in a vote of confidence in the U.S. economy.
KEEPING SCORE: Japan's benchmark Nikkei 225 index jumped 2.4 percent to 19,009.19 and South Korea's Kospi climbed 2 percent to 1,972.45. Hong Kong's Hang Seng advanced 2.3 percent to 21,754.25 and the Shanghai Composite Index in mainland China rose 0.6 percent to 3,531.85. Australia's S&P/ASX 200 added 2.4 percent to 5,028.4. Benchmarks in Taiwan and Southeast Asia also gained.
THE FED, FINALLY: Investors around the world will be watching the Fed, which is expected to announce that it will raise interest rates from record low levels. Fed Chair Janet Yellen and other officials at the U.S. central bank have signaled well in advance that they are likely to raise rates for the first time in nearly a decade. They've also strongly hinted that they'll keep the pace of any further increases gradual, as they try to avoid roiling financial markets that have become accustomed to easy credit. The decision comes as the U.S. economy comes back to full strength even while other big central banks are opting to keep the stimulus taps open to revive flagging growth in their economies.
MARKET INSIGHT: "Efforts will especially be placed on communication this time around, as the Fed will need to carefully harmonize market expectations with their own forecasts," economists at Societe Generale said in a commentary. "Sound too constructive and the market could interpret the Fed as being late in the tightening cycle. Sound too pessimistic and some may lose faith in the progress of the economy. We expect Chair Yellen to strike the right balance."
WALL STREET: Major U.S. benchmarks finished by posting their biggest gains in a week, led by gains in energy companies and banks. The Dow Jones industrial average added 0.9 percent to close at 17,524.91. The S&P 500 increased 1.1 percent to 2,043.41 and the Nasdaq composite index gained 0.9 percent to 4,995.36.
ENERGY: Benchmark U.S. crude futures slipped 26 cents to $37.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.04, or 2.9 percent, to settle at $37.35 a barrel on Thursday but overall oil is down about 30 percent in 2015 and is at its lowest in more than six years. Brent crude, a benchmark for international oils, lost 15 cents to $38.58 a barrel in London.
CURRENCIES: The dollar crept up to 121.85 yen from 121.83 yen in the previous day's trading. The euro edged higher to $1.0940 from $1.0929.
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