Published on Fri, Jun 29, 2007 at 09:05 | Source : Moneycontrol.com
Updated at Mon, Jul 02, 2007 at 11:25
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Fed may raise rates by Feb 09: Daiwa Securities
Asian stocks rose today after the US Federal Reserve left interest rates unchanged and the yen weakened against the dollar. Japan's Nikkei surged 0.87%, or 156.29 points, at 18,088.56 while Hong Kong's Hang Seng rose 0.17%, or 37.28 points, at 21,975.50.
Asian stocks rose today after the US Federal Reserve left interest rates unchanged and the yen weakened against the dollar. Japan's Nikkei surged 0.87%, or 156.29 points, at 18,088.56 while Hong Kong's Hang Seng rose 0.17%, or 37.28 points, at 21,975.50.
Singapore's Straits Times was up 0.15%, or 5.31 points, at 3,543.54 while South Korea's Seoul Composite advanced 0.30%, or 5.2 points, at 1,756.95. However, the Taiwan Weighted was down 0.35%, or 31.38 points, at 8,861.45.
Prasenjit K Basu, Chief Economist, Daiwa Securities, said there was no surprise from the Fed and no change in its approach. On why Asian markets aren't reacting to the US Fed leaving interest rates unchanged, he said, "There was really no surprise from the Fed. It is no longer talking about elevated inflation and that's the only significant change. Otherwise, there is no significant change in the Fed's approach. I think the markets have already moved to the view, over the last 2-3 weeks, that the next move by the Fed is likely to be up rather than down, somewhere between December-February next year."
Speaking on the mood across Asia at this juncture, Basu said, "I think the mood is mixed. We have seen strong growth in India and China, and moderate growth in the rest of Asia. The Asian economies are stable, current accounts are largely in surplus everywhere except India. Inflation is moderating everywhere except China, where there is little bit of a pick up. The overall mood is reasonably good as Asia is still generating good growth with a stable external balance and low inflation."
Singapore's Straits Times was up 0.15%, or 5.31 points, at 3,543.54 while South Korea's Seoul Composite advanced 0.30%, or 5.2 points, at 1,756.95. However, the Taiwan Weighted was down 0.35%, or 31.38 points, at 8,861.45.
