Asia stocks gain on dollar strength, Europe down
SEOUL, South Korea - Asian stocks rose Wednesday, boosted by strength in the dollar, but European markets fell and Wall Street futures were flat ahead of the release of minutes from the Federal Reserve's last policy meeting.
Britain's FTSE 100 fell 0.2 percent to 6,982.33 and Germany's DAX dropped 0.5 percent to 11,796.19. France's CAC 40 shed 0.4 percent to 5,098.08. Futures augured a tepid day for Wall Street. S&P 500 and Dow futures were both little changed.
The U.S. Federal Reserve is set to release minutes from its April 28-29 meeting, when it downgraded its view of the U.S. economy and offered no sign that a rate increase might be coming soon. The release of the minutes is a key event for markets as investors try to divine the timing of the U.S. central bank's first rate hike since the global financial crisis.
Asian markets closed mostly higher after robust U.S. housing data boosted the dollar and gave a lift to exporter stocks in Japan and elsewhere. Japan's Nikkei 225 rose 0.9 percent to 20,196.56 and South Korea's Kospi gained 0.9 percent to 2,139.54. China's Shanghai Composite Index advanced 0.7 percent to 4,446.29. Stocks in Australia and in most Southeast Asian countries also were higher. But Hong Kong's Hang Seng closed 0.4 percent lower at 27,585.05.
The U.S. Commerce Department said housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. That pace ranked as the fastest clip since November 2007. The report that the U.S. homebuilders ramped up construction in April to the fastest pace in nearly seven-and-a-half years gave newfound momentum for an economy that has struggled in recent months.
Benoit Coeure, a top European Central Bank official, said the bank will boost May and June bond purchases intended to stimulate the eurozone's economic recovery, so the bank can buy less in July and August when bond market trading slows down. The purchases are aimed at raising the rate of inflation from zero, considered too low, toward the bank's goal of just under 2 percent. European stock markets rallied after the announcement while the euro depreciated and the dollar gained.
The U.S. housing starts data "makes a welcome relief from the run of generally soft data on the U.S. economy for March and April," Ric Spooner, chief analyst at CMC Markets, said in a commentary. "However, the good news on housing starts brings with it the prospect of rising interest rates."
Benchmark U.S. crude gained 59 cents to $58.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $2.25 on Tuesday to close at $57.99. Brent crude, used to price international oils, rose 76 cents to $64.78 per barrel.
The dollar strengthened to 120.90 yen from 120.67 yen. The euro declined to $1.1125 from $1.1147.