Business

Market mood settles after Fed rate hike concern

Posted May 20, 2016 7:00 am

By The Associated Press

Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, May 20, 2016. Asian stock markets drifted slightly higher on Friday as investors restored calm a day after worries about the Fed's rate hike signals prompted sell-offs.(AP Photo/Ahn Young-joon) The Associated Press

LONDON (AP) - Global stock markets recovered their poise Friday in the wake of sizeable falls triggered by the U.S. Federal Reserve's surprise indication that it could raise interest rates in June.

KEEPING SCORE: In Europe, Britain's FTSE 100 was up 1.3 percent at 6,131 while Germany's DAX rose 0.8 percent to 9,875. France's CAC 40 advanced 1 percent to 4,327. U.S. stocks were poised for solid gains at the open with Dow futures and the broader S&P 500 futures up 0.3 percent.

FED WATCH: Whether the Fed will raise interest rates or not in June is set to be the main driving force across financial markets in coming weeks. On Wednesday, the minutes to the last rate-setting meeting showed Fed officials talking about the possibility of an increase in June - a development that few in the markets had anticipated and which prompted some jitters among investors. But a rate hike is not a certainty given the many potential hurdles ahead, including potential concern over the British vote on whether to stay in the European Union. The vote on so-called Brexit takes place about a week after the Fed's next meeting.

ANALYST TAKE: "Ultimately, the fact is that while a June hike is increasingly credible, it is still the least likely of their two options," said Joshua Mahony, market analyst at IG. "With huge economic implications to the Brexit vote, it is unlikely we will see any action from the Fed next month."

ASIA'S DAY: Japan's Nikkei 225 rose 0.5 percent to 16,736.35 while South Korea's Kospi edged up 0.1 percent to 1,947.67. Hong Kong's Hang Seng index rose 0.8 percent to 19,852.20. China's Shanghai Composite Index added 0.7 percent to 2,825.48. Australia's S&P/ASX 200 gained 0.5 percent to 5,351.30.

OIL: Oil prices were relatively flat, with the benchmark New York rate down 2 cents at $48.63 a barrel and Brent, used to price international oils, fell 18 cents to $48.63 a barrel in London.

CURRENCIES: The euro was up 0.2 percent at $1.1219 while the dollar rose 0.4 percent to 110.39 yen.

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, May 20, 2016. Asian stock markets drifted slightly higher on Friday as investors restored calm a day after worries about the Fed's rate hike signals prompted sell-offs.(AP Photo/Ahn Young-joon) The Associated Press

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