Global stocks rally on expectations of Fed rate hike delay
LONDON: Global stock markets are on Friday closing out a solid week on a strong note as minutes to the US Federal Reserve's last policymaking meeting raised expectations that the central bank will keep interest rates at record lows for longer than anticipated.
KEEPING SCORE: In Europe, Germany's DAX rose 1.1 percent to 10,107 while Britain's FTSE 100 advanced 1 percent to 6,441. France's CAC 40 was 1.1 percent higher at 4,724. Wall Street was poised for a steady opening, with Dow futures and the broader S&P 500 futures up 0.1 percent — a day after they posted sizeable gains in the wake of the publication of the minutes.
FED FACTOR: Those minutes from the Fed's September policy meeting are the main driver in markets as they showed officials worrying over low inflation amid weak commodity prices. Though they expressed confidence in the underlying state of the US economy, traders think policymakers may be getting cool on the idea of raising interest rates for the first time in more than nine years in December and may opt to keep the main Fed funds rate at near zero percent until next year.
THE QUOTE: "The prospect of the first rate hike being pushed back to next year is giving the markets a boost this week," said Craig Erlam, senior market analyst at OANDA. "Whether that continues into next week could depend on how earnings season starts following what is likely to have been another challenging quarter."
GLENCORE GAINS: Shares in commodities group Glencore rose strongly after the company said it is slashing its zinc production by a third and cutting jobs in response to sharp fall in the price of the metal. The move, which will involve a reduction in annual zinc production by 500,000 tons in Australia, South America and Kazakhstan, is the Switzerland-based company's latest response to the slide in commodity prices. In early afternoon trading, Glencore shares in London were up 10.9 percent. Glencore's move will see global zinc production fall by around 4 percent and that's helped the metal rally by 8 percent to $1,800 a ton.
ASIA'S DAY: Japan's Nikkei 225 added 1.6 percent to 18,438.67 and Hong Kong's Hang Seng climbed 0.5 percent to 22,458.80. Australia's S&P/ASX 200 was up 1.3 percent at 5,279.70 and China's Shanghai Composite Index gained 1.3 percent to 3,183.15. Southeast Asian stock markets also rose. South Korea's markets were closed for a holiday.
ENERGY: The price of oil and energy stocks rose as Russia's military actions in Syria raised the risk of a wider conflict in the region. Benchmark US oil gained $1.15 to $50.58 in electronic trading on the New York Mercantile Exchange. Brent crude, which is used to price international oils, rose 70 cents to $53.75.
CURRENCIES: The euro was up 0.6 percent at $1.1363 while the dollar rose 0.3 percent to 120.25 yen.