U.S. stocks ease after Fed's statement on interest rates


LONDON HONG KONG, Aug 5 - World stocks eased from the previous session's record highs while the dollar reached its highest in eight days on Thursday after hawkish remarks by a senior U.S. Federal Reserve official.

Fed Vice Chair Richard Clarida, a major architect of the new policy strategy, said on Wednesday that he felt the conditions for raising interest rates could be met by the end of 2022, raising expectations the central bank could scale back its bond buying programme soon.

It's a question not of whether the Fed taper or how fast, said Giles Coghlan, chief currency analyst at HYCM, adding that he expected the debt purchase by 2015 to start in August or September.

Clarida definitely took a shift.

The MSCI World Share Index was steady at 729.68, compared with a record-high of 731.88 hit in the previous session.

The futures of S&P 500 and futures of AIM Futures rose 0.17%. The S&P 500 closed mostly lower on Wednesday after the Fed comments with stocks indicating a slowdown in jobs growth in July.

However, European stocks hit record highs and were up 0.21% on strong earnings from German company Novo Nordisk and Danish industrial firm Siemens.

UK stocks were steady and the pound rose in value against the dollar to the left of a Bank of England policy meeting.

Markets are looking to see if there will be further rate rises in the UK, particularly as two policymakers have broken ranks to say that the time for tighter policy might be nearing.

The exit strategy, we think, will highlight the Bank's focus on hiking its bulky balance sheet more so than on impending rates, Deutsche Bank analysts said in a note.

Clarida's remarks helped American yields and the dollar.

The benchmark yield of 10 year was last at 1.192%, above a U.S. closing of 1.187%, having touched 1.127% - his lowest level since February - on Wednesday.

The dollar remained steady against an index of currencies after it hit an eight-day high of 92.352. The dollar gained 0.1% in 109.57 yen, while the euro increased 0.1% to $1.1848.

The German 10-year bond yields fell one basis point to - 0.504%. Yields touched below 0.50%, the policy rate of the European Central Bank for the first time since January on Wednesday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.29%.

Uncertainty about Chinese policy remains, but the Asian regional benchmark regained most of the ground lost a week ago when a series of Chinese regulatory crackdowns on sectors from property to education overshadowed Chinese stocks and weighed on the region as a whole.

The Chinese Blue Chip Index was down 0.61%, weighed primarily by investors dumping online gaming companies, fertilizer producers and e-cigarette makers fearing criticism of these industries in state media could portend more government crackdowns.

In the short term, the higher rebound may continue but uncertainties over policy control will drive long-term investors away from Chinese technology names, said Edison Pun, senior market analyst of Saxo Markets.

The LOC index fell 0.83% and Korea index fell 0.3%. But Japanese shares hit a record high, but led by banking stocks and the Nikkei reached 0.52%.

Oil prices fell, wiping out early gains as more countries imposed movement restrictions amid a surge in coronavirus cases and as the U.S. dollar firmed, although tension in the Middle East kept prices from falling further.

Brent crude fell 0.19% to $68.02 a barrel, while U.S. crude lost 0.21% to $70.25 per barrel

Gold was at $1,811. 40 an ounce and continued to rise.

Ether, the world's second largest cryptocoin, was down 1.75% after gained 8.7% a day earlier before an underlying technical adjustment to its ethereum blockchain which should happen later on Thursday.