United States stock index futures dropped on Thursday, a day after the Federal Reserve’s decreased expectations of two interest rate hikes in 2016, which dragged the Standard & Poor’s 500 to its highest level of close this year.
The Federal Reserve –which kept interest rates the same – pointed to modest United States economic growth and a strengthening labor market, but the central bank warned about risks from a sluggish global economy.
Decision from the Federal Reserve to hold interest rates helped oil prices to surge, as improving economic conditions in the United States have helped stocks regain grounds from a rout that had gripped the market this year.
According to a market analyst, “In our view, the Fed has become increasingly responsive to changes in financial conditions. We believe this sensitivity is a problem since we see the Feds intended policy actions as contributing to the very financial conditions that led to its eventual inaction.”
The Standard & Poor’s 500 have now tumbled to only 0.8 percent in 2016, after declining 10.5 percent the previous year.
Market players will now focus on the data which will indicate if the economy’s recovery will continue to acquire momentum, even as low economic conditions at other big countries proceed to prompt other central banks to further ease monetary policies.
The data, which will be published later in the day, is forecasted to indicate that jobless claims soared last week by 9,000 to 268,000.
Dow Jones Industrial Average dipped 59 points or 0.34 percent, with 265,745 points traded, while NASDAQ 100 index sank 18.75 points or 0.43 percent, to trade with 27,636 points, and Standard & Poor’s 500 slumped 18.75 points or 0.43, with 27,636 trading points.
Asian and European Equities
Meanwhile, shares in Asia rose, as they also enjoyed the Federal Reserve’s holding of interest rate hike.
The Nikkei 225 Stock Average gained 0.92 percent. In Japan, the adjusted trade balance for February indicated a surplus of 170 billion yen, lower than the 240 billion yen expected. Exports shed 4.0 percent year on year, more than the 3.1 percent plunge seen, while imports also dived 14.2 percent, slightly lower than the 15.2 percent estimated.
Morgan Stanley Capital International’s broadest index of Asia Pacific shares outside Japan rallied to a two month high and was last up with 1.9 percent.
In China, the CSI 300 index edged 0.6 percent higher with 3,109.88 points, while the Shanghai Composite Index climbed 0.6 percent to 2,886.40.
China’s CSI 300 stock index futures for March grew 1.5 percent to 3,114.8, which is also 4.92 points higher than the current value of the underlying index.
In Hong Kong, the Hang Seng index soared 1.5 percent to 20,548.79 points, elevated mainly by machinery stocks and information technology, as it was also supported by global equity climbs after the United States Federal Reserve cut the number of interest rate hikes anticipated this year.
On the other hand, Britain’s Financial Times Stock Exchange 100 inched down 0.11 percent to 6,170.18, while Germany’s DAX slumped 1.22 percent to 862.10. The France’s CAC 40 also slipped 0.86 percent to 4,424.66, and EURO STOXX decline 0.81 percent to 8,889.80.
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