World stocks gain as Fed winds up 2-day meeting

World stock markets rise as Federal reserve winds up 2-day policy meeting

Associated Press
Markets brush off US economic contraction
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A man looks at the electronic stock board of a securities firm in Tokyo Wednesday, Jan. 30, 2013, as Japan's Nikkei surged 247.23 points, or 2.28 percent to 11,113.95, its highest level since April, 2010. Asian stock markets rose Wednesday after strong U.S. corporate earnings outweighed sagging consumer confidence. (AP Photo/Itsuo Inouye)

BANGKOK (AP) -- World stock markets were slightly higher Wednesday as investors anticipated the U.S. Federal Reserve will stick to a policy of keeping its key interest rate near zero until a firm recovery in the world's No. 1 economy takes hold.

A two-day policy meeting of the central bank's Federal Open Market Committee wraps up later Wednesday. If the Fed sticks to its commitment to low interest rates, that would drive more money toward stock markets, said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.

"The main focus is whether there will be some hints given out about what will be going on in future interest rate moves," Yip said. "Right now, market sentiment remains good."

Last month the Fed said that as long as the inflation outlook is mild, it could keep short-term rates near zero until the unemployment rate dips below 6.5 percent from the current 7.8 percent. That could take until the end of 2015, the Fed predicted.

Britain's FTSE 100 was nearly unchanged at 6,339.23. Germany's DAX rose nearly 0.1 percent to 7,852.80. France's CAC-40 advanced 0.1 percent at 3,789.28. Wall Street futures were flat: Dow Jones industrial futures stood at 13,908. S&P 500 futures held steady at 1,505.

Japan's Nikkei surged 2.3 percent to 11,113.95, its highest closing since late April 2010, as the yen continued to weaken against the U.S. dollar.

Hong Kong's Hang Seng rose 0.7 percent to 23,822.06. South Korea's Kospi rose 0.4 percent to 1,964.43 after the government said manufacturing output rose 0.8 percent in December from November.

Gains in resource stocks helped lift Australia's S&P/ASX 200 by 0.2 percent to 4,896.70. Mining giant Rio Tinto Ltd. gained 1.5 percent and rival BHP Billiton advanced 1.2 percent.

Benchmarks in Singapore, Taiwan, the Philippines, mainland China and Indonesia rose.

Meanwhile, a survey on U.S. consumer confidence Tuesday was unexpectedly weak, but analysts said the result was likely a one-time blip due to the payroll tax increase that was part of the agreement reached by U.S. lawmakers to avert bigger spending cuts and tax increases.

Wall Street stocks rose Tuesday after drugmaker Pfizer posted strong earnings. The Dow Jones industrial average ended higher for the seventh day in eight.

Currently, analysts expect fourth-quarter earnings for 2012 to increase by an average of 4.7 percent for S&P 500 companies, according to the latest data from S&P Capital IQ. That's an improvement on the previous quarter when profit grew by 2.4 percent.

Benchmark oil for March delivery was down 3 cents to $97.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.13, or 1.2 percent, to close at $97.57 on the Nymex on Tuesday.

In currencies, the euro rose to $1.3511 from late Tuesday in New York. The euro hit its highest level against the dollar in nearly 14 months Tuesday after data was released showing a rise in German consumer confidence. The dollar rose to 91.16 yen from 90.69 yen.

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