Asian markets follow Wall Street higher after Fed rate cut

James Denaro, Erica Fredrickson

Specialists James Denaro and Erica Fredrickson work on the floor of the New York Stock Exchange, Wednesday, Oct. 30, 2019. Stocks are slipping in early trading on Wall Street as traders hold back ahead of an interest rate announcement from the Federal Reserve. (AP Photo/Richard Drew)

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

BEIJING (AP) — Most Asian stock markets followed Wall Street higher on Thursday after the Federal Reserve cut a key interest rate.

Tokyo, Hong Kong and Seoul advanced. Shanghai retreated 0.1% after Chinese factory activity weakened more than expected in October.

Investors welcomed the Fed’s third rate cut this year to shore up economic growth amid a bruising U.S.-China trade war. The Fed indicated it won’t cut rates again unless the outlook worsens.

The Fed has “ample time to add a few more gallons of high octane to the tank and boost a sputtering U.S. economic engine,” said Stephen Innes of Oanda in a report.

Tokyo’s Nikkei 225 rose 0.2% to 22,887.06 and Hong Kong’s Hang Seng gained 1.2% to 26,995.65. South Korea’s Kospi added 1.1% to 2,102.38.

Australia’s S&P-ASX 200 lost 0.5% to 6,653.10. Benchmarks in Singapore and Taiwan advanced while New Zealand retreated.

On Wall Street, the benchmark S&P 500 rose 0.3% to 3,046.77, hitting a record for the second time this week. The Dow Jones Industrial Average gained 0.4% to 27,186.69. The Nasdaq composite added 0.3% to 8,303.98.

With its latest rate cut, the Fed has nearly reversed four rate hikes made in 2018.

The central bank’s latest move reduces the short-term rate it controls — which influences many consumer and business loan rates — to a range between 1.5% and 1.75%.

During a news conference, Federal Reserve Chairman Jerome Powell signaled the central bank will likely forgo additional cuts while economic growth and inflation matches the Fed’s outlook.

On Wednesday, the Commerce Department said the U.S. economy slowed to a modest growth rate of 1.9% in the July-September quarter. That surpassed economists’ forecasts for even weaker growth, however.

Meanwhile, a monthly gauge of Chinese factory activity declined more than expected for October amid weak consumer demand and a tariff war with Washington.

The purchasing managers’ index of the China Federation of Logistics & Purchasing, an official trade group, declined to 49.3 from September’s 49.8 on a 100-point scale on which numbers below 50 show activity contracting.

New export orders and other indicators declined.

Chinese economic growth has hurt by weakening consumer demand as shoppers, jittery over the trade war and possible job losses, put off purchases of cars and other big-ticket goods.

Exporters have been hurt by President Donald Trump’s tariff hikes on Chinese imports in a fight over Beijing’s technology ambitions and trade surplus bu the impact on the overall economy has been limited.

The latest data suggest an improvement at the end of the previous quarter “didn’t mark the start of a sustained recovery,” said Julian Evans-Pritchard of Capital Economics in a report.

Japan’s industry ministry reported industrial output rose 1.4% in September over the previous month, but forecasters said activity for the rest of the year is likely to be weak.

ENERGY: Benchmark U.S. crude rose 14 cents to $55.20 per barrel in electronic trading on the New York mercantile Exchange. The contract lost 48 cents on Wednesday to close at $55.06. Brent crude, used to price international oils, gained 23 cents to $60.47 per barrel in London. It lost 99 cents the previous session to $60.24.

CURRENCY: The dollar declined to 108.62 yen from Wednesday’s 108.64 yen. The euro advanced to $1.1168 from $1.1151.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Download our news app

App Store Link
Google Play Link

Click Below to set up your cable box

Latest COVID-19 News

More COVID-19

Cuomo Under Fire News

More Cuomo Under Fire