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Asian shares rise as soft data allay worries over rate hike

WT24 Desk

Tokyo — Asian shares gained Thursday as weak economic figures in the U.S. reinforced expectations the Federal Reserve will remain cautious over raising interest rates, AP reports.

KEEPING SCORE: Japan’s Nikkei 225 rose 0.8 percent to 18,029.21 while Hong Kong’s Hang Seng index jumped 1.8 percent to 22,849.16. The South Korean Kospi added 1 percent to 2,029.87 and Australia’s S&P/ASX 200 gained 0.4 percent to 5,219.10. The Shanghai Composite Index was up 1.4 percent at 3,308.24. Shares in Southeast Asia also were higher.

U.S. DATA: Weak earnings guidance from Wal-Mart caused its stock to slump $6.70, or 10 percent, to $60.03, its worst one-day decline since January 1988. Meanwhile, a Federal Reserve report on Wednesday showed that factory output was sluggish in the late summer, while a separate report on retail sales indicated that Americans are still spending cautiously.

ANALYST VIEW: “The implied probability of a rate hike from the Federal Reserve in the December meeting has dropped to just 28% and below 50% for the March meeting,” Chris Western, an analyst for IG, said in a commentary. With one Fed official likening current tight financial conditions to the impact of two rate hikes, “it does suggest that rate hikes are off the table for this year.”

WALL STREET’S DAY: The Standard & Poor’s 500 index closed down 9.45 points, or 0.5 percent, to 1,994.24. The Dow Jones industrial average fell 157.14 points, or 0.9 percent, to 16,924.75. The Nasdaq composite fell 13.76 points, or 0.3 percent, to 4,782.85.

CURRENCIES: The dollar rose to 119.07 yen from 118.83 in the previous session. The euro also rose, to $1.1479 from $1.1474.

ENERGY: The price of benchmark U.S. crude fell 10 cents to $46.54 a barrel in electronic trading on the New York Mercantile Exchange. It fell 2 cents to close at $46.64 a barrel on Wednesday. Brent crude, used to price international oils, gained 15 cents to $49.84 a barrel in London.

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