Sun, June 16, 2024

Federal Reserve’s Decision Helped to Boost Stocks in Asia

Asian stocks were mixed; market awaits U.S. employment data

On Wednesday, the Federal Reserve made an important announcement. It soon will begin reducing the pace of its monthly bond purchases, the first step toward pulling back on the massive amount of help the central bank had been providing markets and the economy. The Federal Reserve’s decision helped to boost stocks in Asia-Pacific on Thursday.

In Japan, the Nikkei 225 advanced 0.93% to 29,794.37. The Topix index gained 1.18% to end its trading day at 2,056.56.

In South Korea, Kospi added 0.25% on the day to 2,983.22.

It was a good day for mainland Chinese stocks as well. The Shanghai Composite gained 0.81% to close at 3,526.87. The Shenzhen component added 1.305% to 14,555.27.

In Hong Kong, the Hang Seng index was up 0.4%, as of its final hour of trading.

Australia’s S&P/ASX 200 advanced 0.48% to close at  7,428.

Federal Reserve and U.S. stocks

As mentioned above, stocks in Asia-Pacific rose on Thursday. U.S. stocks benefited from the Federal Reserve’s decision one day earlier on Wednesday.

The Dow Jones, S&P 500, and the Nasdaq climbed steadily into the green thanks to the Fed’s decision.

The Dow Jones Industrial Average advanced 104.95 points to 36,157.38. It reached a new record. The S&P 500 gained 0.65% to 4,660.57. As in the case of the Dow Jones, the S&P 500 reached its all-time high. The Nasdaq Composite advanced 1% to 15,811.58 and closed at a record.

The Federal Reserve will begin tapering bond purchases in November. The Fed will reduce buying by $15 billion a month. Still, it is prepared to change the pace of purchases if warranted by changes in the economic outlook.

Federal Reserve Chairman Jerome Powell said the central bank is changing monetary policy appropriately. Powell stated that he doesn’t think that the Federal Reserve is behind the curve. On the contrary, Powell believes that its monetary policy is strong enough to address various scenarios.

A huge number of corporate earnings and announcements jolted certain equities on Wednesday. Lyft advanced 8.2% on strong third-quarter results and CVS Health added 5.7% on better-than-expected earnings.

But Zillow dropped 24.8% after announcing it will close its home buying and flipping business.

Bed Bath & Beyond announced the launch of a digital marketplace that will sell goods from third parties, in addition to a tie-up with grocery chain Kroger. Its shares rose on a partnership announcement with Kroger, but the 15.2% surge that followed was likely fueled by a short squeeze.

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