Global Stocks Rally as Fed Remains Uneasy on Inflation--Update
09 October 2015 - 9:24PM
Dow Jones News
By Chiara Albanese And Riva Gold
Global stocks rose Friday following the release of minutes from
the Federal Reserve's September meeting Thursday that further
reduced investors' expectations for an increase in U.S. interest
rates this year.
The Stoxx Europe 600 rose 0.8% Friday midway through the morning
session to its highest level in a month, tracking earlier gains in
Asian bourses and on Wall Street.
Gains in global markets follow the release of Fed minutes
Thursday showing that central bank policy makers decided against
raising rates in September amid worries that inflation would remain
stuck at ultralow levels. The minutes were taken by investors as a
further sign that the central bank will delay increasing rates for
its first time since 2006. Low interest rates in the U.S. have
buoyed stock markets over the past several years.
"The mood is much more positive," said Darren Ruane, head of
fixed interest rates strategy at Investec Wealth & Investment,
which oversees about $43 billion in assets. "The timing of U.S.
rate hikes may have been pushed out. This has resulted in better
risk sentiment."
The pan-Europe index is on track for its largest weekly gain
since January. Investec is betting on further gains for European
stocks, based on positive growth expectations for the region.
European energy stocks gained 1.7% Friday as oil prices
advanced. Brent crude oil prices were last up 0.7% at $53.73 a
barrel, propelled by a weaker dollar, trader expectations of
shrinking U.S. production and concerns about Russia's involvement
in Syria.
U.S. futures pointed to mild losses at the market open,
following a rally on Thursday after the release of the Fed minutes
that propelled the Dow Jones Industrial Average to its highest
level since Aug. 19. Changes in futures aren't necessarily
reflected in market moves after the opening bell.
Asian shares joined in the rally on Friday on hopes for an
extended period of easy monetary policy. Hong Kong's Hang Seng
Index rose 0.5%, while Japan's Nikkei 225 ended up 1.6%, nearing
its highest level in almost a month. Australia's S&P ASX 200
was up over 1%, a seven-week high.
In corporate news, shares of commodities trader Glencore PLC
were up over 7% in Europe after the firm said it would cut global
zinc production following a collapse in the metal's price. The
recovery in the share price comes amid a rally for the European
basic resources sector, up about 4% Friday.
Investors in the U.S. will reflect on disappointing earnings
from aluminum giant Alcoa Inc., which unofficially kicked off the
third-quarter earnings season by reporting a sharp drop in profit
Thursday.
In currencies, the euro rose 0.3% against the dollar to $1.1316.
The dollar rose 0.2% against the yen. The dollar had initially
weakened after the release of the Federal Reserve minutes.
Gold was up 0.7% at $1152.00 a troy ounce.
The yield on 10-year U.S. Treasurys was flat at 2.098%. Yields
rise as prices fall.
Write to Chiara Albanese at chiara.albanese@wsj.com and Riva
Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
October 09, 2015 06:09 ET (10:09 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.