What’s next for equities

HONG KONG (AFP) – Asian markets posted healthy gains on Monday following another record finish on Wall Street, while the focus turns to the Federal Reserve’s next policy meeting later in the week.

Investors will be keeping a close watch on the US central bank as policymakers have to deal with the fallout from hurricanes Harvey and Irma, which hammered the country and are expected to hit economic growth.

While it is tipped to keep borrowing costs on hold, the bank’s plans for cutting back crisis-era bond-buying stimulus and any signals for the future of interest rates will be pored over.

However, analysts were unsure about any further increases this year with inflation remaining subdued — apart from a bigger-than-expected jump in August — and other indicators still soft.

Despite the likely move to tightening, stock markets remain buoyant and on Friday the Dow and S&P 500 each closed at all-time highs.

In Asia, on Monday Hong Kong rose one percent, Shanghai 0.5 percent higher and Sydney rallying 0.6 percent. Singapore added more than one percent, with Wellington 0.2 percent higher and Taipei climbing 0.4 percent.

Japanese markets are closed for a public holiday.

“Ultimately draining the economy of cheap money can’t be viewed as a positive for markets accustomed to feeding off central bank largess. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek,” said Stephen Innes, head of Asia-Pacific trading at OANDA.



France 24 via AFP

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes