A roundup of trading on major world markets:
NEW YORK – Wall Street has turned from all three major indexes being in positive territory to a mixed performance after comments by Federal Reserve Chair Janet Yellen eased investor concerns about the capacity of the economy to absorb a gradual rise in interest rates.
Yellen acknowledged that tightening financial conditions and uncertainty about China posed risks to the US economy, but told Congress she does not expect the central bank to reverse the rate rise program it began in December.
The Fed expects economic growth to pick up in the current quarter, which would allow it to pursue its plan of “gradual” adjustments to monetary policy, she said.
Fears of a China-led global economic slowdown and oil’s steep slide since the Fed raised rates in December have dampened the market’s expectations for a hike in coming months.
“What Yellen said has been taken positively,” said Richard Sichel, chief investment officer of Philadelphia Trust Co in Philadelphia.
“Stocks in general are cheaper now than they were three days ago or three months ago, so there’s an opportunity to step in.”
At 0652 Thursday AEDT, the Dow Jones industrial average was down 16.26 points, or 0.10 per cent, at 15,998.12.
The S&P 500 was up 14.97 points, or 0.81 per cent, at 1,867.18 and the Nasdaq Composite index was up 50.08 points, or 1.17 per cent, at 4,318.84.
LONDON – Britain’s top share index has moved higher, led by financial stocks as banks recovered some ground on bargain-hunting after three straight sessions of losses.
Gains were curtailed after Federal Reserve Chair Janet Yellen said the Fed should be able to gradually adjust monetary policy thanks to strength in the US economy, despite growing concerns over global growth.
The blue-chip FTSE 100 index rose 40.11 points, or 0.7 per cent, to 5,672.30. Concerns over growth had seen the index fall more than 1 per cent in the previous session, and the benchmark index is down nearly 9 per cent so far this year.
“Financial stocks in general are finding some support after the torrid start to the week, but this looks more like opportunistic bargain hunters dipping a toe in the water rather than a wholesale shift in sentiment,” said Tony Cross, analyst at Trustnet Direct.
HONG KONG – Asian stocks fell on growing concerns about the health of the world’s banks, particularly in Europe, pushing investors into safer assets such as the yen, which stood near a 15-month high versus the US dollar.
Japan’s Nikkei, which tumbled more than five per cent on Tuesday, suffered another bruising session and slid to a 16-month low.
The Nikkei fell 273.05 points, or 2.31 per cent, to close at 15,713.39 points with falling bank shares and a stronger yen continuing to take a toll on sentiment.
The adoption of negative interest rates by the Bank of Japan has provided no support, and the index has dropped more than 10 per cent since the central bank’s surprise easing on January 29.
The Chinese markets are closed this week for the Lunar New Year holidays.
“Concerns about European banks are contributing to the risk off mood in markets. In addition, US data this month has been weak and Fed officials appear to be toning down on rate hikes,” said Shinichiro Kadota, chief FX strategist at Barclays in Japan.
WELLINGTON – The S&P/NZX 50 Index dropped 51.8 points, or 0.9 per cent, to 6,019.49.
