Wednesday, August 10, 2011

ASIA-Shares to gain as Fed smoothes jitters

WELLINGTON: Asian stocks are set to rally on Wednesday as a promise of support for the U.S. economy by the Federal Reserve calmed investors, but markets are likely to remain wary after the extreme volatility of the past two days.

The main Wall Street indices bounced at least 4 percent higher in choppy trade after the Fed promised to keep interest rates low for at least two years and said it was considering further action to support the economy.

In a sign investors were not entirely convinced of the Fed's ability to stave off another recession, they sought safer bets, including the Swiss franc and gold.

Bank stocks were the biggest winners on Wall Street after being hammered in the first two days of the week, with the KBW capital markets index up 6.7 percent.

Asian stocks listed on Wall Street rose 5.33 percent, while world stocks, as measured by the MSCI world equity index , rose 2.1 percent.

British shares gained 1.9 percent while European ''shares rose 1.2 percent ahead of the Fed, in the hope the bank would intervene to stabilise markets.

Short-term U.S. bond yields hit record lows on speculation the Fed would soon start buying back bonds, while the greenback fell broadly, approaching a record low against the yen .

Japanese markets are set to snap a four-day losing streak, with Nikkei futures traded in Chicago 125 points above the last closing level in Osaka.

Australian stocks are also set to surge higher, with share price index futures up 114 points to 4,115, an 80.2 point premium to the close of the underlying S&P/ASX 200 index. ' Reuters


No comments:

Post a Comment