Asian shares seen nudging higher after subdued Fed

WELLINGTON (BestGrowthStock) – Asian stocks will probably open cautiously higher on Wednesday after the Federal Reserve issued a subdued statement about the state of the U.S. economy, which offset optimism over strong retail data.

The Fed said the U.S. economic recovery was still too weak to bring down unemployment and reaffirmed that it still planned to buy up to $600 billion in government bonds, a form of pump priming to support activity. That pushed up bond yields and hurt financial stocks.

On Wall Street the Dow (.DJI: ) finished up 0.4 percent but the other indexes pared their gains and finished flat. Trading volumes were described as anemic and analysts suggest the indexes may be near the top of their rally that has sent them all to two year highs. (.N: )

The S&P retail index (.RL: ) fell 0.5 percent after top electronics retailer Best Buy (BBY.N: ) posted a third quarter profit (Read more your timing to make a profit.) short of expectations and cut its full year outlook. The financial stocks index (.GSPF: ) fell 0.9 percent after the Fed’s statement and rise in bond yields.

Asian stocks listed on Wall Street (.BKAS: ) fell 0.1 percent.

British (.FTSE: ) shares gained 0.5 percent to a 30-month high on the back of stronger energy stocks, amid loose talk that Royal Dutch Shell (RDSa.L: ) may have an interest in rival BP (BP.L: ). European shares edged 0.2 percent higher, buoyed by the U.S. retail data, but closed before the Fed’s statement.

The U.S. dollar gained against the yen and euro after the Fed, with the repeat of intention to proceed with the quantitative easing plan and subsequent rise in bond yields buoying investors.

Japanese markets, which posted a seven month closing high on Tuesday, are seen posting further gains, with the easing in the yen a positive for exporters, although eyes will be on the quarterly Bank of Japan Tankan survey.

A Reuters poll last week showed the mood among manufacturers falling, which did not bode well for the Tankan.

Foreign buyers have been enthusiastic buyers of late and the benchmark Nikkei is possibly heading toward resistance levels at around 10,500. Nikkei futures traded in Chicago 65 points above the last closing level in Osaka.

Australian stocks opened a touch higher, helped by financial shares and Origin Energy, which won a $3.25 billion bid to buy power assets.

Asian shares seen nudging higher after subdued Fed