Global Shares Rise on Fed Signals

By Georgi Kantchev Features Dow Jones Newswires

Global markets advanced and the dollar fell Thursday after the Federal Reserve's latest policy statement damped expectations for U.S. interest-rate increases.

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The Stoxx Europe 600 was up 0.1% in early trading, following gains in bourses across Asia. Futures pointed to opening gains on Wall Street.

U.S. stock indexes climbed to fresh records Wednesday after corporate earnings continued to beat Wall Street expectations and investors found a dovish tilt in the Fed's latest statement.

Officials at the U.S. central bank voted unanimously to leave interest rates unchanged and signaled that the central bank could start shrinking its balance sheet "relatively soon." But tweaks in the Fed's statement indicated that policy makers have grown more concerned about a recent slowdown in inflation.

Wednesday's statement said inflation measures "have declined and are running below 2%." The Fed's previous statement said inflation was running "somewhat below" target.

"Fed officials are broadening out their reasoning for tighter monetary policy," said James Knightley, analyst at ING Bank, in a note to clients. "For the market though, they will need to see the data improve before they will be convinced."

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Investors see a roughly 47% chance of a rate rise by the end of the year, according to Fed-fund futures tracked by CME Group.

The ICE U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was down 0.2%.

Yields on 10-year Treasurys were little changed at 2.282% while German bund yields fell to 0.525%. Yields move inversely to prices.

In Asia, the Nikkei Stock Average gained 0.2% while Hong Kong's Hang Seng Index was up 0.8% at a 2-year high.

In commodities, oil prices were up after recent gains on the back of bullish U.S. supply data. Brent crude, the international benchmark, was up 0.3% at $51.26 a barrel. Gold was up 1%.

Ese Erheriene contributed to this article.

Write to Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

July 27, 2017 03:39 ET (07:39 GMT)