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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Asian markets rise after Fed says it won’t raise interest rates

By mid-afternoon, FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 0.47% while the Hang Seng Index was higher by 1.09%.

Markets Source: Bloomberg

Asia markets cheered on Thursday, as a dovish United States (US) Federal Reserve signalled it would slow down its pace of interest rate hikes, putting an ease on concerns to the rising cost of borrowing. This is even though weak economic data results from China posted yet another monthly slump in manufacturing performance.

Dealers are also watching out for developments on the closed-door trade talks between China and the US, to see if any positive developments could pan out from there.

By mid-afternoon in Singapore, Singapore’s Straits Times Index rose 0.42% or 13.30 points, at 3,187.68, while FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 0.47% or 7.99 points, at 1,692.10.

Chinese indices also saw positive trading with the Hang Seng Index higher by 1.09% or 300.53 points, at 27,943.38, while the Shanghai Composite Index was 9.00 points or 0.35% higher, at 2,584.57.

Tokyo’s Nikkei 225 index gained 1.06% or 216.95 points, to close Thursday’s trading at 20,773.49 points, while the broader Topix Index was higher by 1.08% or 16.73 points, at 1,567.49 points.

Fed interest rates unchanged

The Fed on Wednesday held interest rates steady as expected, but it also removed its notion of ‘further gradual increases’ for its interest rates, adding that it would be ‘patient’ before making any further moves as the country works through global growth risks and trade issues with other countries.

'The case for raising rates has weakened somewhat,' the Fed’s chair, Jerome Powell said.

The greenback struggled near a three-week trough against its major peers as investors reacted to the Fed’s changed tone.

China’s manufacturing activity contracts for the second month

The weaker Chinese data could have been a dampening contributor to the positive but muted trading on Thursday.

China’s manufacturing sector continued to contract for the second consecutive month in January as the country remains embroiled in a scathing trade war with the US.

The official manufacturing purchasing managers’ index (PMI) was at a score of 49.5 points, higher than the 49.4 points in December. The performance was however, better than economists’ expectations.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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