World stocks rise after Bank of Japan eases policy

English: Early_one_yen_coin_front_and_reverse. (Photo credit: Wikipedia)

BANGKOK. stock picks .- World stock markets rose Wednesday after the Bank of Japan became the latest major central bank to announce action to shore up fragile economic growth. The Japanese central bank said it was extending monetary easing by increasing its asset purchasing fund to 55 trillion yen ($700 billion) from 45 trillion yen, to counter the strength of the Japanese yen. The move surprised analysts since the central bank had not been expected to ease policy until late October.

It followed steps by the U.S. Federal Reserve to stimulate growth through so-called quantitative easing. The Fed said last week it will purchase an average of $40 billion a month in mortgage-backed securities until the economy shows significant improvement.

The Fed’s goal is to lower long-term interest rates and encourage more borrowing and spending. The Fed also said it plans to keep its benchmark short-term interest rate near zero until mid-2015. Stock markets, which tend to respond favourably to actions targeting economic growth, rallied sharply following the Fed’s announcement. European stocks rose modestly in early trading. Britain’s FTSE 100 added 0.2 per cent to 5,877.13. Germany’s DAX was marginally higher at 7,351.58 and France’s CAC-40 gained 0.1 per cent to 3,516.30.

Wall Street was poised for a higher open. Dow Jones industrial futures gained 0.2 per cent to 13,529 and S&P 500 futures were up 0.2 per cent at 1,455.90.

In Asia, Japan’s Nikkei 225 index rose 1.2 per cent to 9,232.21, its highest close in more than four months. Hong Kong’s Hang Seng climbed 1.2 per cent to 20,841.91 and Australia’s S&P/ASX 200 added 0.5 per cent to 4,418.40. South Korea’s Kospi gained 0.2 per cent to 2,007.88. ... Continue to read.

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