Global stocks and cryptocurrencies rally after the Fed provides clarity on tapering, while Evergrande fears subside for now

Fed boss Jerome Powell said the central bank is likely to start tapering soon.

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  • Global stocks and cryptocurrencies rallied Thursday after the Federal Reserve gave more details on its tapering plan.
  • Analysts broadly said they expect the Fed to cut back bond purchases in November, with some scope for a delay.
  • Fears about Chinese property developer Evergrande cooled, but an offshore $83.5 million interest payment loomed on Thursday.
  • See more stories on Insider's business page .

Global stocks and cryptocurrencies rose Thursday after the Federal Reserve provided more clarity on its plan for the withdrawal of stimulus, while fears around indebted Chinese property developer Evergrande cooled for the time being.

S&P 500 futures were up 0.74% at 4.50 a.m. ET, after the index snapped a four-day losing streak to close 0.95% higher Wednesday. Dow Jones futures advanced 0.71%, while Nasdaq 100 futures also put on 0.71%, signaling gains when markets open later in the day.

Asian stocks advanced overnight as worries receded about risks to the wider financial system from an Evergrande debt default. China's CSI 300 index of Shanghai and Shenzhen-listed stocks rose 0.65%, while Hong Kong's Hang Seng climbed 1.01%.

In Europe, the pan-continental Stoxx 600 climbed 1.02% in early trading, while London's FTSE 100 gained 0.48%.

Cryptocurrencies rallied across the board after tumbling along with stocks earlier in the week. Bitcoin was up 1% to $43,891, according to Bloomberg prices. Ether , cardano, binance coin and other altcoins all rose more sharply.

Stocks climbed after the US Federal Reserve, the world's most powerful central bank, on Wednesday heavily suggested that it would start cutting back on its bond purchases from November, and finish the job by the middle of 2022. Some Fed policymakers also said they'd like to see interest rates start rising as soon as next year.

Analysts said markets were reassured that Fed Chair Jerome Powell left the door open to maintaining stimulus if the US economy needs it, and by his cautious approach to movement on interest rates.

Jim O'Sullivan, chief US macro strategist at TD Securities, said Powell gave an "unambiguous" signal that the Fed would start tapering bond purchases in November. O'Sullivan said he doesn't expect it to start hiking interest rates until 2023.

Neil Wilson, chief market analyst at trading platform Markets.com, said: "Jay Powell continues to walk the line between guiding the market to expect tightening without unduly worrying investors."

Still in focus for investors is the $300 billion debt crunch faced by Evergrande, China's second-biggest property developer. Fears the company could collapse and send shockwaves across the global economy helped push US stocks to their worst losses since May on Monday.

Yet those concerns were easing somewhat, after Evergrande unit Hengda said it had "resolved" an onshore interest payment via negotiation and the company reassured retail investors that they were a top priority. China's injection of 90 billion yuan ($13.9 billion) into the banking system also bolstered those hoping Beijing would step in to contain any shocks.

Shares in Evergrande jumped 17.62% on Thursday, although they remain more than 80% lower for the year.

But the property developer is still seen as in perilous position, and investors are closely watching a key test for Evergrande Thursday, when an $83.5 million interest payment on an offshore bond is due.

The US bond market was little changed after the Fed meeting, a sign that the central bank hadn't ruffled feathers. The yield on the key 10-year US Treasury note was roughly flat at 1.336% on Thursday. Yields move inversely to prices.

Oil prices continued to rise as the global economy reopened and supplies tightened. Brent crude was up 0.12% to $76.29, while WTI crude was 0.1% higher at $72.28 a barrel.

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