October 20, 2021

Sharemarket gains as optimism grows about outlook for US economy

The sharemarket rose on optimism about the outlook for global growth after the US Federal Reserve signalled it may begin easing its extraordinary support measures for the world’s largest economy.

The benchmark S&P/NZX 50 Index advanced 90.119 points, or 0.7 per cent, to 13305.92 on Thursday.

The US central bank indicated it may start raising its benchmark interest rate sometime next year, earlier than it envisioned three months ago. It also said it will likely begin slowing the pace of its monthly bond purchases “soon” if the economy keeps improving. The Fed has been buying the bonds throughout the pandemic to help keep long-term interest rates low.

Asian shares were mostly higher following the Fed statement. On Wall Street on Wednesday, the S&P 500 rose 1 per cent, breaking a four-day losing streak and the other major indexes also received a bump.

“The US economy is doing…

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