Global stocks mostly up on Tokyo stimulus

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NEW YORK CITY: Global stocks mostly rose Wednesday (Thursday in Manila) as Tokyo launched a massive fiscal stimulus package and the US Federal Reserve kept interest rates low.

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Prime Minister Shinzo Abe unveiled the 28 trillion yen ($266 billion) 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 percent, could retreat if monetary stimulus measures released at Friday’s Bank of Japan meeting disappoint.

The Fed left key interest rates untouched 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 skepticism 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 percent after tech behemoth Apple surged 6.5 percent following better than expected earnings.

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

Analysts cited the Japanese stimulus as supportive of European markets.
Frankfurt stocks advanced 0.7 percent and Paris was 1.2 percent up.

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

AFP

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