Global stocks mostly up after Yellen comments

Associated Press

LONDON (AP) — Global stocks mostly rose Monday after U.S. Federal Reserve Chair Janet Yellen said interest rates in the world's largest economy would stay low for some time yet.

Yellen's comments shored up confidence in financial markets as they suggest the U.S. central bank will continue supporting economic growth despite its campaign to slowly reduce the size of its monetary stimulus program.

The Dow was up 0.8 percent at 16,454 while the S&P 500 was up the same rate at 1,872.81.

European stocks underperformed the global market, however, with Britain's FTSE 100 closing 0.3 percent lower at 6,598.37.

Germany's DAX shed 0.3 percent to 9,555.91 and France's CAC 40 lost 0.5 percent at 4,391.50 after a report showed another drop in inflation across the eurozone. The decline to a four-year low raises concerns of deflation and will add pressure on the European Central Bank to loosen its monetary policy on Thursday.

Earlier, in Asia, Japan's Nikkei 225 gained 0.9 percent to 14,827.83 as investors anticipated the government or the central bank would announce measures to offset the impact of a sales tax hike. Japan's sales tax will increase to 8 percent from 5 percent on Tuesday, a move needed to help stabilize government finances but also a possible setback to economic recovery.

Harumi Taguchi, principal economist at IHS Global Insight, said an unexpectedly weak industrial output report also added pressure for the Bank of Japan to pursue additional monetary easing.

Investors also increasingly expect that China's government will take measures to prevent a slowdown in the world's No. 2 economy. An official manufacturing survey due Tuesday might cement those views after another survey released last week show China's manufacturing at an eight month low.

Hong Kong's Hang Seng added 0.4 percent to 22,151.06 but China's Shanghai Composite shed 0.4 percent to 2,033.31. Australia's S&P/ASX 200 rose 0.5 percent.

South Korea's Kospi finished 0.2 percent higher after losing ground in early trading. The country's military returned fire into North Korean waters after shells from a North Korean live-fire drill fell south of the rivals' disputed western sea boundary.

Lee Sun-yub, an analyst at Shinhan Investment Corp., said the exchange of fire had little impact on foreign investors in South Korea while some local institutional investors used the incident to take profit.

In energy markets, benchmark crude for May delivery was down 30 cents at $101.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 39 cents to close at $101.67 on Friday.

In currencies, the euro was up 0.2 percent at $1.3782 while the dollar strengthened 0.1 percent against the Japanese yen, to 103.08 yen.

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