Market Update & Important Indicators
The rally in global stocks, driven by signs that China would do more to stimulate its slowing economy, faded in the U.S overnight. Fed officials will decide whether to raise interest rates at the central bank's two-day meeting starting Sept. 16. Economists had expected the Fed to raise interest rates at its September meeting before the recent selloff in global markets. The Fed has left the door open to rate increases next week, but many investors and economists say they're less sure now about that possibility. The Dow fell 1.5% to 16,254 and the S&P dropped 1.4% to 1,942.
Australian stocks rallied for a second straight day as markets across the region shook off worries about slowing growth in China. Bank shares again drove broad gains for the local market as they recover from heavy selling recently. The S&P/ASX 200 finished up 2.1% at 5221.1, adding to Tuesday's 1.7% rise.
Japan's Nikkei Stock Average jumped the most in nearly seven years, as a continuing rally in China and bullish comments from Japanese Prime Minister Shinzo Abe helped trigger a squeeze on short positions. The Nikkei Stock Average rose throughout the day, closing up 7.7%, or 1343.4 points, to 18,770.5, marking the benchmark's biggest daily percentage gain since October 2008.
The Shanghai Composite Index closed up 2.3%, adding to its 2.9% gain Tuesday, which some analysts attributed to government-led buying. The benchmark has been recovering since it bottomed out in late August. It was still down more than 40% from its June peak.
Copper prices rose 0.3% to US$2.44/lb, extending their seven-week high, as some investors rushed to buy the metal after China signaled it might take more forceful steps to stimulate economic growth. Nickel also gained, up 1% to US$4.57/lb. Gold prices retreated amid pressure from a stronger dollar and as investors remained cautious over the risk of a potential interest rate increase in the U.S. The precious metal fell 1.4% to US$1,105.8/oz. Brent fell sharply, down 3.9% to US$47.58/bbl, as Government forecasters lowered their estimates for oil prices and oil traders sold off.
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