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Stock Markets Mostly Down After Fed Hints at Dec. Rate Hike

  • Associated Press

An investor reads a newspaper in front of electronic board showing stock information at a brokerage house in Beijing, China, Oct. 29, 2015.

An investor reads a newspaper in front of electronic board showing stock information at a brokerage house in Beijing, China, Oct. 29, 2015.

Global stock markets were generally downbeat Thursday after Federal Reserve policymakers left the U.S. benchmark rate at a record low but indicated they might raise it at their December meeting if the U.S. economy keeps improving.

KEEPING SCORE: Britain's FTSE lost 0.8 percent to 6,387.92 and France's CAC40 edged 0.1 percent lower to 4,884.79. Germany's DAX was up 0.1 percent at 10,843.87. Wall Street looked set for a weak start. Dow futures were down 0.2 percent and S&P 500 futures dropped 0.3 percent.

FEDERAL RESERVE:
In its latest statement, the Fed deleted language expressing concern about the global economy, which led to renewed expectations in financial markets of a December rate hike. Fed Chair Janet Yellen has previously said she wants to start raising rates this year. The Fed cut its benchmark interest rate to almost zero in late 2008 to stimulate the economy during the Great Recession. Low interest rates have been a boon for stock markets for several years.

JAPAN DATA: Stronger than expected Japanese manufacturing data failed to boost sentiment, since it increases the likelihood the Bank of Japan will hold off on further monetary easing. The BOJ wraps up a policy meeting on Friday.

THE QUOTE:
"The hawkish Fed statement and strong Japanese industrial production data put in doubt any further expansion of monetary easing by the major central banks in the near term,'' Angus Nicholson of IG said in a research note.

ASIA'S DAY: Hong Kong's Hang Seng shed 0.6 percent to 22,819.94 and Australia's S&P/ASX 200 dropped 1.3 percent to 5,266.90. South Korea's Kospi slipped 0.4 percent to 2,034.16 while Japan's Nikkei 225 eked out a 0.2 percent gain after wavering all day to close at 18,935.71. China's Shanghai Composite Index rose 0.4 percent to 3,387.32. Shares in Southeast Asia were lower.

CURRENCIES: The dollar slipped to 120.72 yen from 121.07 yen in the previous trading session. The euro rose to $1.0927 from $1.0924. The dollar climbed against other currencies on Wednesday as traders anticipated that higher rates were on the way. Central banks in Europe and Japan are expected to continue their own stimulus programs, keeping their rates near zero.

ENERGY:
Oil prices fell back after soaring the day before. U.S. crude slipped 40 cents to $45.54 in electronic trading on the New York Mercantile Exchange. It climbed $2.74 to $45.94 a barrel in New York on Wednesday. Brent crude, which is used to price international oils, fell 38 cents to $48.67 in London. It rose $2.24, or 4.8 percent, to $49.05 on Wednesday.

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