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Global stocks mostly up on Tokyo stimulus

Jul 28 2016 07:41

New York - Global stocks mostly rose on Wednesday as Tokyo launched a massive fiscal stimulus package and the US Federal Reserve kept interest rates low.

Prime Minister Shinzo Abe unveiled the ¥28trn program in the Japanese government's latest attempt to fire up the lukewarm economy.

Abe gave few details, except to say about half the total would be fiscal measures including government spending.

Analysts warned the Nikkei, which rose 1.7%, could retreat if monetary stimulus measures released at Friday's Bank of Japan meeting disappoint.

The Fed left key interest rates untouched on Wednesday but acknowledged improved economic performance and expressed less anxiety about the impact of the surprise British vote to leave the European Union.

Still, some analysts expressed scepticism the US central bank would lift rates before December.

BBVA said an earlier rate hike was unlikely in light of "the unshakeable uncertainty of 2016, the complicated and delicate task of realigning expectation to policy normalization and the proximity to the November election."

The Dow and S&P 500 finished little changed, but the tech-rich Nasdaq advanced 0.6% after tech behemoth Apple surged 6.5% following better than expected earnings.

Shanghai lost 1.9% following a report that China's banking regulator was considering clamping down on the nation's multi-trillion-dollar wealth management products market.

European stocks rise

Analysts cited the Japanese stimulus as supportive of European markets.

Frankfurt stocks advanced 0.7$% and Paris was 1.2% up.

London stocks closed slightly higher, as data showed the British economy grew by 0.6% in the second quarter, after 0.4% expansion in the previous three months, despite Brexit fears.

The French market was also buoyed by solid earnings from aerospace giant Airbus, up 4.5%, automaker Peugeot-Citroen, up 9.3%, and luxury goods giant LVMH, up 7.5%.

Earnings were mixed in the US, with Dow member Boeing rising 0.8% after reporting a smaller-than-expected quarterly loss, while Coca-Cola sank 3.3% as it reported a 5.1% fall in second-quarter revenues to $11.5bn.

Molson Coors Brewing sank 5.1% on reports that SABMiller paused integration work in advance of its planned merger with brewing giant AB InBev.

Molson Coors was set to acquire SABMiller's 58% stake in the MillerCoors venture as a component of the $103bn transaction. US shares of AB InBev lost 3.7%, while SABMiller fell 2.4%.

equities  |  markets  |  global markets


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