GLOBAL MARKETS DJIA 30668.53 303.70 1.00% Nasdaq 11099.15 270.81 2.50% S&P 500 3789.99 54.51 1.46% FTSE 100 7273.41 85.95 1.20% Nikkei Stock 26845.05 518.89 1.97% Hang Seng 21186.66 -121.55 -0.57% Kospi 2485.25 37.87 1.55% SGX Nifty* 15798.00 127.5 0.81% *June contract USD/JPY 134.52-53 +0.52% Range 134.68 133.73 EUR/USD 1.0444-47 0.00% Range 1.0471 1.0433 CBOT Wheat July $10.500 per bushel Spot Gold $1,830.34/oz -0.1% Nymex Crude (NY) $116.01 -$2.92 US STOCKS
U.S. stocks soared after the Federal Reserve approved its biggest interest-rate increase since 1994 but suggested moves of that scale would likely not become common.
The S&P 500 climbed up 1.5%. The Dow Jones Industrial Average added 1% and the Nasdaq Composite rose 2.5%.
The Fed's move is its latest effort to quell inflation through tighter monetary policy. Investors had largely expected the Fed to raise its short-term benchmark rate by 0.75 percentage point. What some had worried about heading into Wednesday's interest-rate decision was that the Fed would have to raise interest rates at an even more aggressive pace to tamp down inflation.
Ultimately, the guidance the Fed gives about the direction of interest rates is more important for markets than the size of the rate increase, said Dorian Carrell, a fund manager at Schroders.
Stocks rose broadly, with ten of the S&P 500's 11 sectors ending higher.
Technology stocks, which have been among the hardest-hit areas of the market this year, were among the biggest gainers.
ASIAN STOCKS
Japan's Nikkei Stock Average rose 1.9% to 26832.59, tracking Wall Street's rally after the Fed delivered an anticipated 75bps rate increase. Fed Chair Powell pledged not to stop the aggressive tightening approach until bringing inflation back to the target level, which suggests a possible 50bps-75bps increase in July, while also saying the outsized rate increase was unusual, said Tina Teng, markets analyst at CMC Markets, in an email. Gains on the Nikkei were broad.
South Korea's benchmark Kospi rose 2.0% to 2497.17 in early trade, led by tech and battery stocks. Wall Street's rally overnight after the Fed's rate increase to quell inflation was helping buoy investor sentiment. Bargain-hunting was kicking in after a seven-session losing streak, adding to the upbeat mood. USD/KRW fell 1.0% to 1,278.00, paring recent steep gains ahead of the Fed's policy decision.
Hong Kong's Hang Seng Index edged 0.1% lower to 21280.64, reversing its opening gains, on prospects for fund outflows from the city. The Fed might further tighten monetary policy, which could trigger fund flow pressure on emerging markets such as Hong Kong, said KGI Research in its morning commentary. The Hang Seng TECH Index was down 0.1% at 4699.14.
Chinese shares were higher in early trade after opening flat. The Shanghai Composite Index gained 0.3% to 3314.07, the Shenzhen Composite Index was 0.4% higher at 2107.17 and the ChiNext Price Index added 0.5% to 2587.34. Sentiment was also being supported by China's latest production and retail sales data which were above expectations, UOB analysts said in a note. However, they remained cautious over China's economic outlook, "given that domestic consumers have yet to loosen their purse strings."
FOREX
JPY weakened against G-10 and Asian currencies as risk-on sentiment spurred by regional equity-market gains undermined the yen's haven appeal. Ahead of the BOJ's monetary policy decision on Friday, there are growing calls for the central bank to widen the yield-curve-control band to bring a 0.5% yield into play, ING economists said in a research report. Such a move, or consideration of it, could give a short-term boost to JPY, the economists said. USD/JPY rose 0.5% to 134.39, SGD/JPY gained 0.5% to 96.89 and AUD/JPY climbed 0.8% to 94.44.
METALS
Gold was steady in the early Asian session amid hopes that Treasury yields may peak out. Some traders were seeing "light at the end of the Fed rate hiking tunnel," said Oanda senior market analyst Edward Moya in an email. Aggressive rate increases over the next couple of Fed meetings suggest the markets could be close to a peak with surging Treasury yields. While the Fed may deliver one more 75 basis point rate increase, traders are doubting there'll be a steady stream of super-sized hikes, the analyst added. Spot gold was down 0.1% at $1,830.34/oz.
OIL SUMMARY
Oil futures rose in a possible technical rebound after they fell to their lowest settlement in two weeks on Wednesday. Volatility in the oil market appears to be on the rise again as the economic outlook darkens, Citi Research analysts said in a research report. The IEA's latest oil market report was more bearish regarding 3Q compared with its prior projections, but the IEA also warns of possible tightness in its initial forecast for 2023, with robust demand growth and dwindling OPEC spare capacity, the analysts said. Front-month WTI crude oil futures were 0.9% higher at $116.36/bbl and front-month Brent crude oil futures were 0.8% higher at $119.42/bbl.
TOP HEADLINES Fed Raises Rates by 0.75 Percentage Point, Largest Increase Since 1994 GM, Ford CFOs Say They Are Preparing for Economic Slowdown Rising Interest Rates Could Cool Industrial Investment, Executives Say Investors See Higher Defaults Ahead as Interest Rates, Inflation Take a Toll EU Moves to Wean Itself off Russian Natural Gas With Deal ECB Looks to Tackle Rising Borrowing Costs in Weaker Economies Japan's Exports Rose in May on Robust Demand Australian Job Market Remains Strong in May Despite Rising Rates New Zealand Economy Contracts 0.2% in First Quarter India Official's Opposition to Deals Unsettles WTO Meeting Steve Bannon Loses Bid to Have Contempt Case Dismissed EPA Lowers Bar for Toxic Chemicals Contamination Fauci Tests Positive for Covid-19 Elon Musk Says He Voted for a Republican for the First Time Elon Musk Expected to Reiterate Desire to Own Twitter Spotify to Slow Its Hiring by 25% WWE Board Probes Secret $3 Million Hush Pact by CEO Vince McMahon BitMEX Co-Founder Sentenced to Probation on U.S. Compliance Charge Caterpillar Relocation Extends U.S. Manufacturing's Southern Shift McDonald's Settles French Tax Case for $1.3 Billion Ford Is Recalling Over 2.9 Million Vehicles for Risk of Rollaway Crashes
(END) Dow Jones Newswires
06-15-22 2315ET
