Oct 9, 2014 7:41 AM
Global stock rally runs out of steam
The Associated Press
BANGKOK (AP) A global stock market rally driven by hopes the U.S. Federal Reserve will keep interest rates low ran out of steam on Thursday. Investors were digesting more bad economic news in Germany and lower growth forecasts for the world economy.
KEEPING SCORE: Britain's FTSE 100 was flat at 6,478.94 while Germany's Dax was up 0.5 percent to 9,036.85. France's CAC-40 fell 0.3 percent to 4,156.74. Wall Street looked set to edge down on the open, with futures for the Dow Jones industrial average down 0.2 percent and those for Standard & Poor's 500 down almost 0.1 percent.
ASIA'S DAY: Tokyo's Nikkei 225 was off 0.7 percent at 15,478.93, adding to the previous day's 1.2 percent loss. Hong Kong's Hang Seng gained 1.2 percent to 23,534.53 and China's Shanghai Composite Index added 0.3 percent to 2,389.37. Seoul was closed for a holiday. India's Sensex rose 1.6 percent to 26,664.39. Sydney and Taiwan rose.
THE FED: Minutes from the Fed's latest policy meeting showed policymakers would start to raise interest rates only after the economy came close to the U.S. central bank's goals for maximum employment with inflation running at an annual rate of 2 percent. The minutes revealed policymakers' concern about the impact on the United States of a strong dollar, which can drag on exports, and weak eurozone growth.
ANALYST'S TAKE: "U.S. growth is slow. Foreign growth is slower... The Fed has no choice but to be deliberately vague about when rate hikes may eventually come," said an analysis report from DBS Group.
GLOBAL GROWTH: Any optimism that the Fed might be slow in raising rates was offset by news that Germany's exports sank 5.8 percent in August, the biggest monthly drop in five years. The figure raises concerns that Europe's largest economy may fall into recession. That follows the IMF's move to cut its outlook for this year and next for global growth, citing weakness in Japan, Latin America and Europe.
ENERGY: Benchmark U.S. crude fell 3 cents to $87.28 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract dropped $1.54 to an 18-month low of $87.31 on lower global demand and high supplies.
CURRENCY: The dollar declined to 107.69 yen from Wednesday's 108.11 yen. The euro rose to $1.2769 from $1.2734.