This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/live/2015/sep/18/asian-stock-markets-mixed-as-us-federal-reserve-keeps-rates-on-hold-live

The article has changed 30 times. There is an RSS feed of changes available.

Version 27 Version 28
Stock markets rattled after dovish Fed leaves rates unchanged Stock markets rattled after dovish Fed leaves rates unchanged
(17 days later)
9.14pm BST9.14pm BST
21:1421:14
US stock markets close 2% downUS stock markets close 2% down
Rupert NeateRupert Neate
US stock markets closed down almost 2% on Friday following sharp falls across the world due to investor’s renewed concern about the health of the global economy after the US Federal Reserve’s decided to leave American interest rates on hold.US stock markets closed down almost 2% on Friday following sharp falls across the world due to investor’s renewed concern about the health of the global economy after the US Federal Reserve’s decided to leave American interest rates on hold.
The Dow Jones Industrial Average closed down 291.7 points ( or 1.75%) to 16,383 points. The S&P 500 lost 32.09 points (or 1.6%) to 1,958.11 and the Nasdaq fell 66.72 points (1.36%) to 4,827.23 points.The Dow Jones Industrial Average closed down 291.7 points ( or 1.75%) to 16,383 points. The S&P 500 lost 32.09 points (or 1.6%) to 1,958.11 and the Nasdaq fell 66.72 points (1.36%) to 4,827.23 points.
The Fed is fanning fears over global growth, causing a big selloff: http://t.co/N57fUQRJf4 pic.twitter.com/7cjswWI260The Fed is fanning fears over global growth, causing a big selloff: http://t.co/N57fUQRJf4 pic.twitter.com/7cjswWI260
You can also read our updated news story here:You can also read our updated news story here:
Related: Global shares fall sharply as US rate decision unnerves marketsRelated: Global shares fall sharply as US rate decision unnerves markets
UpdatedUpdated
at 9.15pm BSTat 9.15pm BST
8.30pm BST8.30pm BST
20:3020:30
Helena SmithHelena Smith
Over in Athens tonight, Syriza has held a pre-election rally where Padomes leader Pablo Iglesias has just addressed the crowd with the opening line: “I will speak in Spanish because in Berlin they have to learn what Spanish and Greek sounds like!”Over in Athens tonight, Syriza has held a pre-election rally where Padomes leader Pablo Iglesias has just addressed the crowd with the opening line: “I will speak in Spanish because in Berlin they have to learn what Spanish and Greek sounds like!”
He then went on to liken Tsipras to “a lion ... Noone has ever tried to defend your rights like Alexis.”He then went on to liken Tsipras to “a lion ... Noone has ever tried to defend your rights like Alexis.”
5.48pm BST5.48pm BST
17:4817:48
European shares close sharply lower after Fed commentsEuropean shares close sharply lower after Fed comments
Nick FletcherNick Fletcher
The US Federal Reserve may have left interest rates unchanged but the central bank’s cautious comments about the outlook for the global economy sent shudders through global markets.The US Federal Reserve may have left interest rates unchanged but the central bank’s cautious comments about the outlook for the global economy sent shudders through global markets.
Chris Beauchamp, senior market analyst at IG said: “Markets can be a fickle thing. Going into last night’s Fed meeting, talk revolved around how damaging a rate hike would be to equity markets. It turns out that no hike can also be rather problematic, especially when accompanied by a sober statement and downgrades to economic forecasts. As a result, stocks moved swiftly into the red this morning and have stayed there all day.”Chris Beauchamp, senior market analyst at IG said: “Markets can be a fickle thing. Going into last night’s Fed meeting, talk revolved around how damaging a rate hike would be to equity markets. It turns out that no hike can also be rather problematic, especially when accompanied by a sober statement and downgrades to economic forecasts. As a result, stocks moved swiftly into the red this morning and have stayed there all day.”
European markets were harder hit than the UK, with the weaker dollar pushing the euro higher and causing concern for European exporters. So the closing scores showed:European markets were harder hit than the UK, with the weaker dollar pushing the euro higher and causing concern for European exporters. So the closing scores showed:
On Wall Street the Dow Jones Industrial Average is currently down 235 points or 1.42%.On Wall Street the Dow Jones Industrial Average is currently down 235 points or 1.42%.
On that note we’ll close for the moment, but should be back to catch the Wall Street close. Meanwhile, thanks for all your comments.On that note we’ll close for the moment, but should be back to catch the Wall Street close. Meanwhile, thanks for all your comments.
4.41pm BST4.41pm BST
16:4116:41
Christopher Vecchio, Currency Analyst at DailyFX, confirms that a US rate hike this side of Christmas is now less likely than before:Christopher Vecchio, Currency Analyst at DailyFX, confirms that a US rate hike this side of Christmas is now less likely than before:
The implied probability of a rate hike in October, per the Fed funds futures contract, dropped from near 45% yesterday to 18% today; for December, from above 60% yesterday to 26% today.The implied probability of a rate hike in October, per the Fed funds futures contract, dropped from near 45% yesterday to 18% today; for December, from above 60% yesterday to 26% today.
4.08pm BST4.08pm BST
16:0816:08
UpdatedUpdated
at 4.09pm BSTat 4.09pm BST
3.28pm BST3.28pm BST
15:2815:28
Some analysts are arguing today that the Fed has created a new ‘third mandate’, on top of its existing dual duties to deliver price stability and maximum employment.Some analysts are arguing today that the Fed has created a new ‘third mandate’, on top of its existing dual duties to deliver price stability and maximum employment.
Jeremy Zirin, chief equity strategist at UBS Wealth Management, says (via Reuters)Jeremy Zirin, chief equity strategist at UBS Wealth Management, says (via Reuters)
“Investors are wrestling with how concerned they should be regarding global growth.”“Investors are wrestling with how concerned they should be regarding global growth.”
“The Fed has introduced a quasi third mandate about the global growth, apart from the labor market and inflation.”“The Fed has introduced a quasi third mandate about the global growth, apart from the labor market and inflation.”
That means added uncertainty, which usually equals falling stock markets....That means added uncertainty, which usually equals falling stock markets....
UpdatedUpdated
at 3.47pm BSTat 3.47pm BST
3.22pm BST3.22pm BST
15:2215:22
Every major stock market is in the red, with the exception of the Australian and Hong Kong indices which closed many hours ago before the rout got underway.Every major stock market is in the red, with the exception of the Australian and Hong Kong indices which closed many hours ago before the rout got underway.
UpdatedUpdated
at 3.30pm BSTat 3.30pm BST
3.20pm BST3.20pm BST
15:2015:20
Perhaps we can file today in the ‘inexplicable market reaction’ box.Perhaps we can file today in the ‘inexplicable market reaction’ box.
Stocks are acting like they expected more QE yesterday,Stocks are acting like they expected more QE yesterday,
UpdatedUpdated
at 3.20pm BSTat 3.20pm BST
2.44pm BST2.44pm BST
14:4414:44
Bill Gross backs the FedBill Gross backs the Fed
Bond trading veteran Bill Gross says the Fed made the right call last night, given financial market conditions.Bond trading veteran Bill Gross says the Fed made the right call last night, given financial market conditions.
Speaking on Bloomberg TV right now, Gross suggests that the current era of non-standard monetary policy could last for another five or ten years.Speaking on Bloomberg TV right now, Gross suggests that the current era of non-standard monetary policy could last for another five or ten years.
That would allow the problems created during the ‘fat’ decades of debt-driven growth pre-Lehman Brothers to be worked off, he argues.That would allow the problems created during the ‘fat’ decades of debt-driven growth pre-Lehman Brothers to be worked off, he argues.
Bill Gross says we need low interest rates in order to recapitalize. Watch live http://t.co/H89WEacu1C pic.twitter.com/um4ZAczB26Bill Gross says we need low interest rates in order to recapitalize. Watch live http://t.co/H89WEacu1C pic.twitter.com/um4ZAczB26
Gross concedes through that asset prices are simply too high, partly because they’re being priced against record low US interest rates and German bond yields.Gross concedes through that asset prices are simply too high, partly because they’re being priced against record low US interest rates and German bond yields.
Ultimately, there has to be a rebalance if capitalism itself is to rebalance, Gross added.Ultimately, there has to be a rebalance if capitalism itself is to rebalance, Gross added.
2.35pm BST2.35pm BST
14:3514:35
Wall Street opens sharply lowerWall Street opens sharply lower
Nick FletcherNick Fletcher
US markets have followed the rest of the world lower after the Federal Reserve’s concerns about economic growth.US markets have followed the rest of the world lower after the Federal Reserve’s concerns about economic growth.
The Dow Jones Industrial Average has lost more than 200 points or 1.2% in early trading, while the FTSE 100 is now 1.6% lower and Germany’s Dax has dropped 3.49%, with investors worried about euro strength against a weaker dollar hitting European exporters.The Dow Jones Industrial Average has lost more than 200 points or 1.2% in early trading, while the FTSE 100 is now 1.6% lower and Germany’s Dax has dropped 3.49%, with investors worried about euro strength against a weaker dollar hitting European exporters.
Dow opens down more than 200 points http://t.co/Mnt63OLRu6 pic.twitter.com/Ds2IKg7tMGDow opens down more than 200 points http://t.co/Mnt63OLRu6 pic.twitter.com/Ds2IKg7tMG
UpdatedUpdated
at 2.36pm BSTat 2.36pm BST
2.31pm BST2.31pm BST
14:3114:31
2.30pm BST2.30pm BST
14:3014:30
The Wall Street opening bell has been rung, and the New York stock market is open for business.The Wall Street opening bell has been rung, and the New York stock market is open for business.
2.23pm BST
14:23
The scale of today’s selloff is a little surprising, given that the markets didn’t really expect the Federal Reserve to raise interest rates rates yesterday.
But they also didn’t expect the Fed to be quite so gloomy about the global economy. That dovishness is making investors around the globe reassess the prospects of a rate hike.
Guy Dunham of Baring Asset Management in London explains:
Federal Reserve slightly surprised market participants by combining a decision to leave interest rates where they are with dovish language, and revised down their median short and long-term expectations by 0.25%.
Investors who hold risky assets are particularly uneasy, he adds, given the confusion over the timing of any rate hike.
Here’s a reminder of how rate expectations have been pushed back:
Implied probabilities of a Fed rate hike following yesterday’s meeting pic.twitter.com/dNsqvdk1dN
1.55pm BST
13:55
The Fed decision sparked a small rally in some emerging markets, but nothing sensational.
India’s Sensex index jumped 2% earlier today, on relief that US rates hadn’t been hiked. The optimism has faded, though, with the index up just 1% in late trading.
Viktor Shvets, head of Asian strategy at Macquarie Securities, predicts that the optimism won’t last. He told CNBC:
“I think in the short-term, emerging markets will be supported because the Federal Reserve didn’t tighten. Basically, there’s little bit less pressure for U.S. dollar to appreciate, a little bit more liquidity.
“There’ll be some relief particularly, in places like Indonesia, Malaysia, up to places like Brazil, South Africa, Russia. Will it last? The answer is no.”
Warning: This market bounce will be short-lived » http://t.co/1Y5CeNECdD pic.twitter.com/qexyUc7dzw
Updated
at 1.56pm BST
1.46pm BST
13:46
Traders heading to Wall Street this morning should take their best tin hat.
Futures: Dow -200; S&P -24; Nasdaq - 51
Updated
at 1.46pm BST
1.45pm BST
13:45
Now this is curious. Someone in the City has sold shares in two blue chip heavyweights, BP and HSBC, way below the market value.
Shares in both companies briefly dropped by almost 5%, before swiftly rebounding.
C'mon, who did it?! #HSBC pic.twitter.com/Y2yeQTv3cU
Someone had a pop at BP stock as well pic.twitter.com/zXXflkce2L
It’s probably a ‘fat-fingered trade’, where someone presses the wrong button. But two at the same time suggests something went badly awry.
@FerroTV It's no fat finger. Someone SAT on a keyboard.
1.40pm BST
13:40
Andy Haldane’s fascinating speech (online here) also outlines how Britain could introduce a tax on money.
That would encourage people to spend, pushing up inflation, and avoiding the problem that it’s hard to cut UK interest rates much lower.
Another option is to embrace an electronic currency like Bitcoin, which Haldane says has “real potential”.
If paper currency were then abolished altogether, it would be possible to impose negative interest rates on deposits.
As Haldane puts it:
What I think is now reasonably clear is that the distributed payment technology embodied in Bitcoin has real potential. On the face of it, it solves a deep problem in monetary economics: how to establish trust – the essence of money – in a distributed network. Bitcoin’s “blockchain” technology appears to offer an imaginative solution to that distributed trust problem.
Whether a variant of this technology could support central bank-issued digital currency is very much an open question. So too is whether the public would accept it as a substitute for paper currency. Central bank-issued digital currency raises big logistical and behavioural questions too. How practically would it work? What security and privacy risks would it raise? And how would public and privately-issued monies interact?
1.19pm BST
13:19
The Bank of England’s chief economist is trending on Twitter after warning that the UK recovery is weakening, and may need a rate cut not a hike.
The editor of the FT is leading the charge:
Must read: Andy Haldane on the future of money #BigBrain http://t.co/l69PKc7lVl
#Interestrates could actually be cut next, not raised, says @bankofengland economist Andy Haldane. Some fear #ChinaMeltdown & 0% #inflation
Migration season for central bank doves? PostFed, BoE's Haldane says may need to cut rates, not raise them http://t.co/n0sBOM1gH6 @ReutersUK
Updated
at 1.20pm BST
12.51pm BST
12:51
European markets hit new lows
The European selloff is gathering pace, led by Germany’s DAX index.
The strengthening euro, and new confusion over when the Fed might hike rates, are proving to be a nasty cocktail for traders across Europe.
Conner Campbell of SpreadEx explains:
The longer investors had to ruminate on Thursday’s Fed statement the worse they seemed to take it, with the European indices widening their losses as the day went on.
An export-hurting rise in the euro-dollar was the main culprit, with the currency pairing jumping by around 0.4% as the morning continued.
And with US stocks heading for a bath too, all the main European indices have shed at least 1%. The DAX is down 2.9%, back below the 10,000 point mark at 9,933.
And here’s a reminder of how the euro jumped last night, when the Fed decision came.
Updated
at 1.24pm BST
12.13pm BST
12:13
The futures market is now suggesting chunky falls on Wall Street when trading begins, in two hours time.
Out of hours Dow now pointing to a -170 start, back into Tuesday's range.
Updated
at 12.13pm BST
12.12pm BST
12:12
Andy Haldane: UK isn't ready for higher interest rates
Katie Allen
The Bank of England’s chief economist is reiterating his opposition to an interest rate hike in the near future and says policy could just as easily be loosened as tightened if the UK is hurt by turmoil in emerging markets.
Andy Haldane is using a speech to business owners in Northern Ireland to discuss events in the Greek economy and in China, where an economic slowdown has coincided with a stock market rout and sent jitters through global markets.
Haldane, one of nine policymakers that vote on interest rates at the Bank, reiterated warnings he made earlier this year that the UK economy was not ready for higher borrowing costs.
Haldane’s comments put him at odds with other members of the monetary policy committee, who have been talking up the strength of the UK economy and its ability to withstand contagion from slowing emerging markets.
“In my view, the balance of risks to UK growth, and to UK inflation at the two-year horizon, is skewed squarely and significantly to the downside,” Haldane said in the speech to the Portadown Chamber of Commerce.
“Against that backdrop, the case for raising UK interest rates in the current environment is, for me, some way from being made.”
Haldane said it was unclear how much the UK would be affected by the slowdown in emerging nations, significant drivers of global growth in recent years. But he said there were significant risks of contagion given the growing clout of developing economies in recent years.
Added to that, Haldane highlighted challenges in the UK.
“While the UK’s recovery remains on track, there are straws in the wind to suggest slowing growth into the second half of the year. Employment is softening, with a fall in employment in the second quarter and surveys suggesting slowing growth rates. Surveys of output growth, in manufacturing, construction and possibly services, have also recently weakened. All of these data were taken prior to recent emerging market economy wobbles,” he said.
Given those risks, there was no case right now for hiking, he said, concluding:
“One reason not to do so is that, were the downside risks I have discussed to materialise, there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target.”
How low can you go? - speech by Andrew Haldane http://t.co/w3rPTP8fJq
11.32am BST
11:32
Anne Richards: Fed was right to hold fire
Janet Yellen doesn’t want to go down in history as the Fed chair who plunged the global economy into recession, and the US with it.
So explains Anne Richards, chief investment officer at Aberdeen Asset Management. She believes the Federal Reserve’s rate-setting committee was right to leave interest rates unchanged
Richards told Bloomberg TV that raw economic data simply doesn’t provide a compelling reason to hike rates. If the Fed moves too quickly, it “could make 2016 much uglier from an economic perspective”.
Richards added that the Fed has now looked “beyond its borders” to survey the global economy, and concluded that the outlook for next year isn’t as rosy as they thought.