Markets initially jump, then quickly pare gains
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Stocks inched higher in Asia on Thursday, tracking muted gains on Wall Street overnight even as the Federal Reserve signaled an optimistic view of the U.S. economy.
Many investors retreated to the sidelines ahead of President Donald Trump's nomination for the Federal Reserve's next leader. Trump is likely to tap Fed governor Jerome Powell as the next chairman of the central bank, according to a person familiar with the matter.
Equities indexes in Australia, Korea and Japan hit 2017 highs in early trading, but quickly pared gains to become little changed. S&P 500 futures were recently down 0.3%.
"Stocks have run hard in the past few days and investors seem to question whether further gains are justified," said Michael McCarthy, chief market strategist at CMC Markets.
Apart from the Fed chairman decision, investors are also looking to the U.S. jobs report on Friday and the Bank of England's meeting later Thursday, where the central bank is expected to announce the first rate increase in a decade.
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Australia's S&P/ASX 200 was less than 0.1% higher after topping May's high early Thursday, as losses in banking stocks following National Australia Bank's (NABZY) disappointing forecast weighed on further gains in energy stocks. Other commodity stocks rose, with big miners BHP Billiton (BHP.AU) and Rio Tinto (RIO) up nearly 2% each.
The Nikkei Stock Average extended gains to be 0.1% higher, after rising as much as 0.5% earlier in the session following continued gains in the dollar against the yen overnight.
Meanwhile, New Zealand's NZX 50 Index rebounded 0.2% after bucking gains in the region Wednesday.
However, some analysts said despite the Fed signaling one more rate increase in 2017, the central bank's projected pace should help Asian markets garner more gains.
"Asian stocks have some more room to go higher, especially if [the] Fed does not abandon its accommodative stance," said Rajeeb Pramanik, a portfolio manager at Canadian pension investment manager PSP Investments.
With "decent" earnings in Asia, stock valuations are still reasonable given the reflationary environment globally, he added.
(END) Dow Jones Newswires
November 01, 2017 22:48 ET (02:48 GMT)