Asian stock markets rise amid belief that US Fed would go slow on increasing interest rates

All Asian stock market indices were trading higher on Tuesday (18 October) with the Shanghai Composite up 1.17% at 3,076.80 as of 6.24am GMT. This followed comments by Fed vice-chair Stanley Fischer which led traders to believe that the US central bank would go slow on increasing interest rates.

On Monday (17 October), Fischer said that the US was facing an aging population, poor investment and slower foreign growth. He said these economic factors may remain weak for some time, because of which it had to delay increasing interest rates for some more time.

The vice-chair said that the US central bank wanted to see higher interest rates. He, however, added that it had to currently keep these rates low to ensure maximum employment and price stability, the US Federal Reserve's two policy goals.

Analysts at DBS, a Singaporean bank said that the Fed was confused over increasing rates. They were quoted by the Financial Times as, "Communication at the Fed over the future path of interest rates remains as muddled as ever."

Despite this increase in Asian markets, trading volumes were low and well within the regular trading ranges. Commenting on the same, Kazuhiro Takahashi, an equity strategist at Daiwa Securities was quoted by Reuters as, "Investors are slightly risk averse while their attention has been on the dollar-yen levels. They are waiting for a turning point, and until then, they will likely stay on the sidelines."

Going forward, investors are said to be awaiting China data including the September quarter's gross domestic product (GDP), which is expected to be published this week. Such data will indicate the health of the world's second largest economy and help people take investment decisions.

Indices in the region were trading as follows at 6.50am GMT:

Overnight (17 October), the FTSE 100 closed 0.94% lower at 6,947.55, while the Dow Jones Industrial Average closed lower by 0.29% at 18,086.40

Among commodities, oil prices were trading higher amid expectations that the market was not oversupplied as believed by some analysts. While WTI crude oil was trading higher by 0.78% at $50.33 (£41.12) a barrel, Brent crude was trading 0.72% higher at $51.89 a barrel as of 6.54am GMT.