TOKYO- Asian stocks rose to the highest in a month after the Federal Reserve signalled rate settings were likely to remain accommodative, but the imminent UK election and a deadline for Sino-US trade talks kept investors cautious.
The Fed kept interest rates unchanged, as expected, at its policy meeting on Wednesday but indicated interest rates would remain on hold, which nudged Wall Street stocks higher.
That helped MSCI’s broadest index of Asia-Pacific shares outside Japan climb 0.8 percent to the highest since Nov. 11. Japan’s Nikkei stock index rose 0.18 percent and US stock futures edged up 0.1 percent. Australian shares were down 0.7 percent, however, weighed by the financial sector after a money-laundering scandal.
“The Fed’s accommodative stance does support equities, but the chance of a disruptive election outcome in Britain is very real,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“You also have the US-China trade problem. We’re likely to see subdued trading and some investors may lock in profits as the day progresses.”
The S&P 500 rose 0.29 percent on Wednesday after the Fed’s rate decision, which included enough dovish tones to cheer markets.
Traders are bracing for a series of make-or-break events over the next few days that have the potential to cause huge swings in financial markets for months to come.
Sterling traded near the highest in more than two years versus the euro and close to an eight-month high versus the dollar before voting begins in an election that will determine whether Britain exits the European Union in an orderly fashion.
Polls show the Conservatives’ lead shrinking ahead of an election starting later on Thursday, which could jeopardize chances of a smooth Brexit.
Exit polls for Britain’s election will begin around 2200 GMT after voting closes, then official results will begin to trickle in.
UK Prime Minister Boris Johnson’s ruling Conservative Party is running on a pledge to enact a swift split from the EU, ending more than three years of uncertainty. – Reuters