Market update: Markets are up assuming the Fed will stand pat on tapering – 30.10.2013

Source: Henderson Global Investors

Another round of mixed to slightly softer data in the US on Tuesday reinforced the belief that the US Federal Reserve will likely maintain its aggressive stimulus policy. Hence, at the conclusion of their two-day meeting today, the general consensus is for a stay on tapering asset purchases. Wall Street stocks traded mostly higher. The Dow Jones and the S&P 500 ended at record highs with gains of 0.7% and 0.6% on the day. One stock boosting both indices was IBM after the firm announced another $15 billion of stock buyback.

Asian shares followed the positive mood from the US with most bourses closing up. The best performer in the region was the Hang Seng, up 2.0%, followed by the Shanghai Composite, up 1.5%. A lower-than-expected September industrial production release in Japan failed to dent the mood with the Nikkei 225 closing up 1.2% helped by a weaker yen, and record earnings reports by heavyweight banks Daiwa Securities and Nomura. The sentiment is followed in Europe this morning. In London the FTSE 100 is benefiting from impressive third quarter results from Next while Barclays also posted a strong rise in nine-month pre-tax profits. At the time of writing both the FTSE Eurofirst 300 and the FTSE 100 were up 0.5%.