Global shares steady as US rate hike jitters fade

AP News
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Posted: Mar 12, 2015 8:35 AM
Global shares steady as US rate hike jitters fade

LONDON (AP) — Global stocks were steady Thursday after several days of volatile trading linked to anxiety over a probable rate hike in the U.S.

KEEPING SCORE: In Europe, Germany's DAX fell 0.1 percent to 11,795 while the CAC-40 in France was flat at 4,997. Britain's FTSE 100, which underperformed over the past couple of days, was up 1 percent at 6,788. U.S. stocks were poised for solid gains at the bell, with Dow futures and the broader S&P futures up 0.3 percent.

U.S. JITTERS: One of the main drivers in markets at present relates to when the Federal Reserve will start raising interest rates. Concerns that it may decide to do so in June were largely responsible for the early week retreat in global stock markets, particularly those in the U.S. Figures Thursday will be monitored in that light. The Fed's key rate has been near zero since the global financial crisis. That has been a boon for stock markets so the possibility rates will rise in coming months is prompting investors to shift away from shares.

ANALYST TAKE: "A busier afternoon on the economic front in the form of retail sales and unemployment claims could see Wall Street play catch-up with Europe," said David Madden, market analyst at IG.

ASIA'S DAY: Japan's Nikkei 225 rose 1.4 percent to 18,991.11 and Australia's S&P/ASX 200 jumped 1 percent to 5,850.20. Hong Kong's Hang Seng added 0.3 percent to 23,797.96 and the Shanghai Composite Index gained 1.8 percent to 3,349.32. South Korea's Kospi slipped 0.5 percent to 1,970.52, shedding gains as worries about the economic outlook offset an unexpected rate cut by the central bank.

CURRENCIES: While the Fed is poised to raise rates, the European Central Bank is trying to lower them and the Bank of Japan is also engaged in massive monetary easing. The divergent policies are hammering the euro and sending the dollar higher. The euro recovered some ground Thursday, trading 1.1 percent higher at $1.0671. The dollar meanwhile was down 0.5 percent at 120.67 yen.

ENERGY: Benchmark U.S. crude oil was up 50 cents to $48.68 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 88 cents to $58.78 a barrel in London.