Asian stocks fluctuated in early trade as investors grappled with the minutes of the U.S. Federal Reserve's December meeting. U.S. stocks rose for the second day, and the dollar fell from its 14-year high as the minutes indicated a preference for gradual rate hikes in 2017.
Oil remained little changed while gold resumed its gains.
Decoding Fed Minutes
Most members of the Federal Open Markets Committee (FOMC) reiterated their call to maintain a ‘gradual' pace of rate hikes over the coming years, according to the minutes of the December 13-14 meeting released on Wednesday.
Participants expected that, with gradual adjustments inthe stance of monetary policy, economic activity wouldexpand at a moderate pace and labor market conditionswould strengthen somewhat further.U.S. Federal Reserve Minutes (December 13-14 Meeting)
However, almost all the participants “indicated that the upside risks to their forecasts for economic growth had increased” from the prospect of tax reform and fiscal stimulus from Donald Trump's administration.
The commentary from the Fed spurred a second straight day of gains in the U.S. equity markets. The S&P 500 Index advanced 0.6 percent led by energy shares while the Dow Jones Industrial Average resumed its advance towards the 20,000 mark, closing 60 points adrift of the same.
Dollar Slips, Yen Rises
The commentary on the risks stemming from fiscal policy triggered a drop in the dollar. The Bloomberg Dollar Spot Index fell 0.3 percent, marking its second consecutive session of declines.
The Japanese yen traded little changed after snapping a three-day losing streak on Wednesday.
Crude Inventory Drops
Oil prices traded with a negative bias despite industry data indicating a decline in inventories. U.S. stockpiles dropped 7.43 million barrels last week, according to a report from the American Petroleum Institute.
Organization of Petroleum Exporting Countries' production dropped by 310,000 barrels per day in December due to unplanned disruptions in Nigeria, according to a survey conducted by Bloomberg.
West Texas Intermediate crude traded little changed around the $53 per barrel mark, after gaining 1.8 percent on Wednesday. The Energy Information Administration will report official data on U.S. stockpiles later today.
Gold rose for the third consecutive session to trade above the $1,170 per ounce mark.
Steady Start?
The SGX Nifty Index rose 0.38 percent to 8,229 as of 7:05 a.m., indicating a solid start for Indian equities. The NSE Nifty 50 Index has been trading in a 70 point range since the beginning of 2017, as investors await the start of the October to December quarter earnings season, which will give a better picture of the impact of the government's demonetisation initiative.
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