Market update: Here we go again: all hopes pinned on the Fed meeting starting today – 29.10.2013

Source: Henderson Global Investors

A generally well-received corporate earnings season and hopes that the economy is not yet strong enough for the US Federal Reserve (Fed) to begin tapering its asset purchases underpinned US stocks on Monday. In a quiet trading session, the S&P 500 index managed to carve out another intraday record high but closed up just 0.1%, while the Dow Jones and Nasdaq ended slightly down. Economic data out on Monday disappointed and all eyes are now on the Fed’s two day meeting that begins today.

Asian shares fell overnight, and the US dollar hovered around its recent lows as investors await the outcome of the Fed meeting. News that the central bank in China had resumed its open market operations for the first time since 15 October failed to lift worries over liquidity problems in the Chinese markets, with shares on mainland China falling slightly by 0.2%. Meanwhile, better economic data in Japan led to a fall of 0.5% in the Nikkei 225 as the yen gained strength. 

European bourses this morning are cautiously mixed; however, at the time of writing the FTSE Eurofirst 300 had clocked up 0.2%, while the FTSE 100 gained 0.4%. The small rally is contributed to a rise in the shares of BP, which helped drive oil stocks higher. It raised its dividend by 5.6% after third quarter earnings fell by less than expected.