A stock market watcher stands in front of an ASX board.

ASX rises after gains on Wall Street as Federal Reserve minutes point to slower rate hikes

Australian equities started the day slightly higher as minutes from the US Federal Reserve’s November monetary policy meeting indicated the possibility of slower rate hikes going forward.

The ASX 200 was up 15 percent, or 0.2 percent, to 7,246 at 10:15 a.m. AEDT.

At the same time, the Australian dollar rose to 67.38 US cents.

Mining stocks led gains in the first 30 minutes of trading.

Chalice Mining was up 4.9 percent, Silver Lake Resources was up 3.4 percent and Evolution Mining was up 3.1 percent.

However, Magellan was down 2.6 percent, Pendal Group was down 2.3 percent and Telix Pharmaceuticals was down 2.1 percent on open.

US stocks rise on hopes of a slower rate hike

Wall Street’s main indexes rose on Wednesday after minutes from the Federal Reserve’s November meeting showed rate hikes may be slowing soon.

A “substantial majority” of policymakers agreed that it would be “probably soon appropriate” to slow the pace of rate hikes, the minutes say.

Since the Fed’s last meeting in November, investors have become more optimistic that price pressures are beginning to ease, suggesting smaller rate hikes could dampen inflation.

“What stock markets needed to see for recent strength to continue was what we got from the minutes,” said Michael James, managing director of equities trading at Wedbush Securities in Los Angeles.

The Dow Jones Industrial Average was up 0.37 percent to 34,225.33, the S&P 500 was up 0.64 percent to 4,029.26 and the Nasdaq Composite was up 1.08 percent to 11,294.92.

Trading volume was light ahead of the Thanksgiving holiday on Thursday as the US stock market was expected to be open for only half a session on Friday.

The S&P 500 posted 21 new 52-week highs and no new lows, while the Nasdaq Composite posted 81 new highs and 112 new lows.

US jobless claims hit a three-month high

On Wednesday, data from the US Department of Labor showed that the number of jobless claims rose more-than-expected last week.

US business activity contracted for a fifth month in November, according to the S&P Global Flash US Composite PMI Output Index.

Initial jobless claims fell by 4,000 to a seasonally adjusted 222,000 in the week ended November 12.

Economists polled by Reuters had forecast 225,000 applications last week.

“I didn’t really think there were any surprises,” said Jordan Kahn, chief investment officer at ACM Funds in Los Angeles, California.

“They still seem to be pointing out that inflation risk is still high and recent data has been more solid than they thought.”

“People will be excited when they [see] that some participants mentioned the need to slow down the rate hikes. But the market has already priced in a 50 basis point rate hike for December, and the probability of a 50 basis point rate hike in the Fed futures market was already 70 percent as of this minute,” he said.

Credit Suisse falls after posting a huge loss

Meanwhile, Europe’s STOXX 600 index rose 0.6 percent on Wednesday to its strongest level since mid-August.

Mining stocks extended gains for a second session, rising 1.8 percent, while travel & leisure and retail traders rose 1.9 percent and 1.7 percent, respectively.

Credit Suisse slipped 6.1 percent after the embattled Swiss lender estimated a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) for the fourth quarter as wealthy customers made hefty withdrawals.

Oil prices fell more than 3 percent overnight, continuing a series of volatile trades as the Group of Seven (G7) nations considered a price cap on Russian oil above current market levels and US gasoline stocks rose by more than analysts had expected.

Brent crude fell 4 percent to trade at $84.79 a barrel as of 8:15 a.m. AEDT.


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