World markets climb to new highs after US Fed confirms current stimulus policy
2013-07-12 17:14:44
Investors have been focusing on when the Federal Reserve might end its massive bond-buying programme. Fed chairman Ben Bernanke had made previous comments suggesting the policy would be phased out. But on Wednesday Mr Bernanke clarified his position, saying a “highly accommodative” policy was needed for the foreseeable future.
Since late last year, each month the Fed has been buying 85bn dollars in Treasury and mortgage bonds. The purchases have kept interest rates low, with the aim of encouraging more Americans to buy homes and cars, and hopefully bolster economic growth.
Investors worry that once the Fed starts scaling back its bond buying, interest rates will rise.
Microsoft was one of the biggest winners on the stock market on Thursday. Its shares jumped 2.8% after the company announced a plan to overhaul its structure.
On the other side of the Atlantic European shares hit a five-week high led by growth-sensitive stocks. The pan-European FTSEurofirst 300 touched 1,201.79, its highest level since early June.
Meanwhile, Japan's Nikkei share average rebounded in choppy trade even though the Yen's rally paused, while firmer Asian tocks boosted market sentiment. The Nikkei rose 0.4% to 14,472.58, after opening 1.0% lower on the back of the Yen's surge against the dollar.