Asia stocks slip on Fed's latest; Europe shares open higher

Kelvin Chan, The Associated Press</span>
Published Thursday, May 4, 2017 1:47AM EDT
Last Updated Thursday, May 4, 2017 8:45AM EDT

HONG KONG -- Asian stock markets slipped and the dollar held its ground Thursday after the Fed's latest assessment of the U.S. economy reinforced expectations for more interest rate increases later this year. European shares rose after an index of economic activity rose to a six-year high.

KEEPING SCORE: European benchmarks opened higher, with Germany's DAX jumping 1.1 per cent to 12,608.83 and France's CAC 40 climbing 0.9 per cent to 5,335.83. Britain's FTSE 100 advanced 0.3 per cent to 7,257.20. Wall Street was poised to open higher, with Dow futures edging up 0.1 per cent to 20,919.00 and broader S&P 500 futures gaining 0.2 per cent to 2,387.40.

FED IN FOCUS: U.S. interest rates remained unchanged after the latest policy meeting by the Federal Reserve, which also said it expects the U.S. economy, the world's biggest, to start growing faster. The Fed's remarks provided further support for another Fed interest rate rise, widely expected for June. The U.S. central bank has signalled it plans to continue gradually raising interest rates that have been at ultralow levels for years, gently removing the stimulus that has helped fuel an extended stock rally.

MARKET INSIGHT: "Monetary policymakers acknowledged that there is some softness in the economy, but seemed confident that recent economic slowdown is likely to be temporary. Otherwise there were no surprises in the statement," said Hussein Sayed, chief market strategist at FXTM, adding that investors' attention will now turn to the release of U.S. nonfarm payrolls on Friday.

EUROPEAN OUTLOOK: A composite index measuring economic growth across the 19-country eurozone struck a six-year high in April. The IHS Markit output index rose to its highest since April 2011, in a sign that economic growth is expanding at a robust pace.

BANK EARNINGS: HSBC posted a 12 per cent increase in quarterly pretax profits as improved trading and rising interest rates helped support revenue at the London-based global bank. The figures are adjusted for one-off items. After factoring out those items, however, net profit slipped.

ASIAN SCORECARD: South Korea's Kospi added 1 per cent to end at 2,241.24 but other major regional benchmarks fell, with Hong Kong's Hang Seng edging 0.1 per cent lower to 24,683.88 and the Shanghai Composite on mainland China dipping 0.3 per cent to 3,127.37. Australia's S&P/ASX 200 fell 0.3 per cent to 5,876.40. Singapore's benchmark fell but indexes in other Southeast Asian countries and Taiwan rose. Japan's market remained closed for a holiday.

CURRENCIES: The dollar rose to 112.83 yen from 112.64 yen in late trading Wednesday. The euro rose to $1.0921 from $1.0887.

ENERGY: U.S. benchmark crude futures shed 28 cents to $47.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 16 cents to settle at $47.82 a barrel on Wednesday. Brent crude, used to price international oils, lost 24 cents to $50.55 a barrel in London.

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