By Wei-Zhe Tan
Most Asian stock markets were modestly higher Thursday as investors
digested the U.S. Federal Reserve's decision not to deliver fresh
stimulus measures, and looked ahead with some hope for positive action
from the European Central Bank later in the global day.
The U.S. central bank kept its target interest rate unchanged, revised
down its outlook on the U.S. economy and reiterated its willingness to
take further action if necessary.
Tim Condon, economist at ING, said the Fed's "do-nothing outcome was
largely priced-in."
"There was less pressure on the FOMC because there is more pressure on
the ECB," Condon said in a note.
Sydney-based Macquarie Private Wealth division director Martin Lakos
said there's still uncertainty on what precisely the ECB will do.
"We've heard all the talk from European officials, but the cynics are
waiting to see what real policy action transpires," he said.
With global manufacturing activity largely disappointing, including
weak outcomes in the U.S. and China Wednesday, most investors remained
reluctant to pour money into stocks and other riskier assets.
The U.S. employment report on Friday is also a key focus for markets,
and the stronger-than-expected private sector ADP jobs report Thursday
underpinned some hopes for a better outcome.
In Japan, the Nikkei Stock Average rose 0.6%, with corporate earnings
continuing to be the immediate driver.
Mitsui Fudosan added 1.7% after reporting encouraging fiscal first
quarter results, while Astellas Pharma extended Wednesday afternoon's
rally to rise 1.9% after it reported an increase in operating profit.
Some Japanese exporters got a lift from the greenback's gains
Wednesday following the Fed's remarks, with Toyota Motor rising 4.2%,
and Sony 3.2% higher.
Australia's S&P/ASX 200 was up 0.1%, South Korea's Kospi Composite was
steady and New Zealand's NZX-50 added 0.4%.
Resources stocks were largely higher in Sydney, with BHP Billiton up
0.4% and Fortescue Metals gaining 2.5%.
Dow Jones Industrial Average futures were up four points in screen trade.
The U.S. dollar ticked lower against the euro after rising Wednesday
on the Fed's lowered outlook for U.S. growth and the absence of fresh
easing measures.
However, trade remained rangebound as investors turned their attention
to the ECB's decision later.
"With the FOMC in the rear view, markets now move to this week's next
significant risk event with the European Central Bank policy meeting
this evening, and it's clear the bank has a lot to live up to," said
Melbourne-based Chris Gore, currency analyst at Go Markets in a note
to clients.
"Mario Draghi's pledge to do 'whatever it takes to preserve the euro'
has inspired a material shift in sentiment, but if markets walk away
unappeased, it's likely to spark another bout of top-tier risk
aversion," he added.
The single currency was at $1.2238 against the dollar, from $1.2225
late in New York Wednesday, and at Y96.06 against the yen, from
Y95.92. The dollar was at Y78.49, from Y78.44.
Nymex crude oil futures for September delivery were down 13 cents at
$88.78 per barrel, while spot gold traded $2.00 higher at $1602.10 per
troy ounce.
-Wei-Zhe Tan, Dow Jones Newswires; +65-6415-4142; wei-zhe.tan@dowjones.com
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(END) Dow Jones Newswires
August 01, 2012 21:38 ET (01:38 GMT)
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