Global Equities Advance On Fed Decision

LONDON, (UrduPoint / Pakistan Point News -22nd Sep,2016) :- World stock markets gained ground Thursday as the US Federal Reserve opted against lifting interest rates -- while signalling likely action later this year.

The Fed kept its benchmark interest rate unchanged for the sixth straight meeting, saying it needs to see a bit more sign of strength in the US economy. Even so, Fed Chair Janet Yellen said the economy continues broadly to show progress.

Officials indicated they foresee one rate hike before the end of 2016. "Despite there being enough to suggest a rate hike in November or, even more likely, December, the markets were buoyed by the simple fact that the Federal Reserve opted for inaction," said Spreadex analyst Conor Campbell.

Stocks reacted by moving ahead across the board. London closed up 1.1 percent, mining giant Glencore leading the way with a 5.5-percent rise, while Frankfurt and Paris were in lockstep as both added 2.3 percent in value.

"The markets as a whole continue to be very sensitive to the discourse of central banks" and "the fact the Fed has confirmed its accommodating approach has boosted appetite for risk," said Thomas Vlieghe, senior portfolio manager at French asset management firm Mandarine Gestion.

Wall Street joined the party, the Dow up 0.8 percent after Yellen's comments. "There was no rate hike, there was the reminder that policy rates are apt to remain low, and stocks rallied on the happy thought that a half-full punch bowl will be kept on the table," said Briefing.com analyst Patrick O'Hare.

The broad-based S&P 500 and the tech-rich Nasdaq Composite Index both advanced around 0.6 percent around two hours into trade. Earlier in Asia, Hong Kong added 0.4 percent and Shanghai rose 0.5 percent while Tokyo was shut for a public holiday.

At the end of one of its most anticipated meetings for some time, Fed policymakers said the economy continued to improve and the argument for a rise was strengthening but more evidence of sustained progress was needed.

However, while they lowered their growth forecast for this year, the policy committee said the rebound would continue through the second half, and suggested borrowing costs could rise before the end of the year.