Asia stocks rise as Summers exits Fed-A A +A
Monday, September 16, 2013
BANGKOK -- Asian stock markets rose Monday after economist Lawrence Summers withdrew as a candidate to head the Federal Reserve, a development that many investors believe will prolong the U.S. central bank's monetary stimulus.
Analysts said Summers was perceived as unenthusiastic about the Fed's aggressive bond-buying program which helped push down interest rates to spur lending and jumpstart economic growth following the financial and economic crisis five years ago.
The program has also weakened the dollar and boosted stock markets.
Summers was considered the leading contender to succeed current Fed chairman Ben Bernanke.
His withdrawal means Fed vice chair Janet Yellen, a supporter of quantitative easing, "is firmly in pole position for running toward the top job," said Stan Shamu, market analyst at IG in Melbourne, Australia.
The Fed's stimulus, which involves buying $85 billion a month in Treasurys and mortgage bonds, is certain to be scaled back once the economy recovers sufficiently.
However, many investors think the winding down will be slower without Summers as Fed chief.
As former director of the National Economic Council, Summers helped steer the U.S. through the financial crisis early in Obama's term but was also the target of critics who felt he was too cozy with Wall Street.
Hong Kong's Hang Seng rose 1.2 percent to 23,190.15. South Korea's Kospi advanced 0.7 percent to 2,009.09. Australia's S&P/ASX 200 gained 0.5 percent to 5,247.30.
Benchmarks in the Philippines, New Zealand, Thailand and India also rose.
Meanwhile, Markets in Japan were closed for a public holiday and China's Shanghai Composite Index fell 0.2 percent.
Benchmark oil for October delivery was down 78 cents to $107.43 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 39 cents to close at $108.21 a barrel on the Nymex on Friday.
In currencies, the euro rose to $1.3361 from $1.3294 late Friday. The dollar fell to 98.96 yen from 99.35 yen. (AP)