NEW YORK, July 29 (Reuters) – Asian stocks were due to follow an optimistic Wall Street session on Thursday after the Federal Reserve kept interest rates at very low levels, while the US dollar fell to a low of two years.
The Fed on Wednesday repeated a promise to use its “full range of tools” to support the economy, but warned that prospects “will depend significantly on the course of the virus.”
“We will probably see a 1% gain … later this morning,” said CommSec market analyst Tom Piotrowski in Sydney. “The gains on Wall Street were helpful in that regard.”
The Dow Jones Industrial Average on Wednesday ended 0.6% higher, the S&P 500 gained 1.24% and the Nasdaq Composite added 1.35%.
MSCI’s broader index of Asia-Pacific stocks outside Japan was up 0.28%, while its global stock index was up 0.81%.
Australian S & P / ASX 200 futures were up 0.9%, while Japanese Nikkei 225 futures were down 0.04%. The Nikkei 225 Index closed down 1.15% to 22,397.11 on Wednesday. The futures contract rose 0.64% since that close.
Hong Kong Hang Seng index futures were up 0.14%.
The dollar index against a basket of currencies fell 0.44% to 93.42 on Wednesday after hitting 93.17, the weakest since June 2018.
The greenback has fallen on expectations that the Fed will continue its ultra-loose monetary policy for years to come, and speculates that it will allow inflation to rise more than it had previously indicated before raising interest rates.
“Given what the Fed has already done and where things are at the moment, it is really on the sidelines in terms of what else they can do,” said Piotrowski of CommSec.
A more pressing issue for investors is what the United States Congress does to further support the country’s economy, Piotrowski said, referring to negotiations on a new stimulus agreement.
“If Congress does that for market satisfaction, it will simply drag the rest of the global markets higher with them,” Piotrowski said.
United States President Donald Trump said Wednesday that his administration and Democrats in Congress were still “very far apart” on a new coronavirus relief bill.
Among the US stocks moving forward Wednesday were Starbucks Corp, which saw its business “steadily recover,” and Advanced Micro Devices, which rose after its revenue forecast rose. Boeing shares fell after a larger-than-expected loss.
US deaths from the new coronavirus topped 150,000 on Wednesday, more than any other country and nearly a quarter of the world total, according to a Reuters count.
Australia has reported far fewer cases of coronavirus than many other countries, with nearly 15,600 confirmed infections and 176 deaths as of Wednesday.
But an increase in community transmission in the more populous states of southeast Victoria and New South Wales (NSW) has alarmed health officials just as the economy was reopening.
Australia has dispatched defense and emergency medical teams, usually deployed to disaster areas, to nursing homes in the city of Melbourne to help contain the worst coronavirus outbreak in the country.
In commodity markets, oil prices rose after a sharp drop in U.S. crude inventories, but another record-breaking day for coronavirus cases worldwide kept profits under control.
Brent crude oil futures settled at $ 43.75 a barrel, an increase of 53 cents, or 1.2%. Western US intermediate crude futures settled at $ 41.27 per barrel, gaining 23 cents, or 0.6%.
Report by Suzanne Barlyn; Editing by Sam Holmes
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