World stocks stall amid profit-taking
BANGKOK (AP) — World stocks stalled Thursday as profit-taking negated earlier gains that came after the U.S. Federal Reserve predicted moderate growth for the world's No. 1 economy.
European stocks were mixed in early trading. Britain's FTSE 100 rose 0.4 percent to 5,742.13 while Germany's DAX lost 0.3 percent at 6,686.89 and France's CAC-40 fell 0.3 percent to 3,223.37.
Wall Street appeared headed for a slightly higher open, with Dow Jones industrial futures rising 0.1 percent to 13,057. S&P 500 futures added 0.1 percent to 1,388.70.
Trading is Asia was volatile. Japan's Nikkei 225 index opened higher and then fell in the afternoon before closing slightly ahead at 9,561.83 as traders proceeded with caution ahead of the Bank of Japan's policy-setting meeting Friday.
South Korea's Kospi also zigzagged until finally setting 0.1 percent higher at 1,964.04. Hong Kong's Hang Seng posted a 0.8 percent gain to 20,809.71. In mainland China, the benchmark Shanghai Composite Index edged 0.1 percent lower to 2,404.70.
Some analysts attributed the bumpy trading to relief over the Fed's assessment of the U.S. economy, followed by a wave of profit-taking.
"We saw Asian markets fly out of the gates before pulling back on some profit taking following the recent run," said Stan Shamu of IG Markets in Melbourne.
U.S. financial markets barely budged after the Federal Reserve, following a two-day policy meeting, said Wednesday it would stick with its plan to keep its key short-term interest rate near zero.
The Fed's assessment that U.S. economic growth would pick up gradually remained only a marginal source of comfort for investors — especially in Asia, which relies on the U.S. as a crucial market for its exports of cars, electronics, textiles and other goods.
Analysts at Credit Agricole CIB in Hong Kong said in an e-mail that they remain skeptical "about the ability of risk assets (such as stocks) to continue rallying but acknowledge that at least in the near term the Fed has put a floor under such assets."
The Fed detailed no plans to extend its bond-buying program when the current iteration ends in June, although Fed chairman Ben Bernanke made clear that if the economy slows, the Fed could take further steps to boost growth.
Among individual stocks, Hong Kong-listed China Everbright International Ltd. soared 8.2 percent, following the resignation of vice chairman and executive director Li Xueming. Li is the older brother of Bo Xilai, a powerful Chinese politician felled by a messy scandal involving the high-profile murder of a British businessman.
In Hong Kong, Galaxy Entertainment Group jumped 3.7 percent after announcing plans to double the size of its flagship Macau casino in a $2.1 billion expansion.
Among mainland Chinese shares, Warren Buffett-backed BYD Auto lost 3.7 percent after reporting its first quarter net profit plunged 90 percent from a year earlier. China Life Insurance, the country's biggest insurer, lost 1.1 percent after its first-quarter net profit dropped 29 percent.
Benchmark oil for June delivery was up 11 cents to $104.23 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 57 cents to end at $104.12 per barrel in New York on Wednesday.
In currencies, the dollar fell to 81.12 yen from 81.29 yen amid the Fed's tepid assessment of the U.S. economy. The euro rose to $1.3241 from $1.3230.
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AP researcher Fu Ting contributed from Shanghai.
