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Asian stock markets buoyed by Fed statement

Thursday - 8/1/2013, 12:46am  ET

Trader David O'Day talks into his mobile phone as he works on the floor of the New York Stock Exchange Wednesday, July 31, 2013. Steady growth in the U.S. economy and higher company earnings are pushing the stock market higher in early trading. (AP Photo/Richard Drew)

PAMELA SAMPSON
AP Business Writer

BANGKOK (AP) -- Asian markets rose Thursday after the U.S. Federal Reserve gave no indication it was preparing to wind down a massive bond-buying program that has propelled investors into stocks.

The Fed wrapped up a two-day policy meeting on Wednesday without any changes in its monetary policy that has supported the economy by keeping interest rates ultra-low. That, in turn, has encouraged lending and spending and also boosted stock markets as investors seek returns higher than offered by bonds.

In China, meanwhile, a slight improvement in manufacturing also helped lift the mood. The China Federation of Logistics and Purchasing index released Thursday rose to 50.3 last month from June's 50.1.

Another survey, however, showed manufacturing at its lowest in 11 months. HSBC's purchasing managers' index fell to 47.7 last month from 48.2 in June. Readings below 50 on the 100-point scale indicate a contraction in activity.

Japan's Nikkei 225 index, which has zigzagged all week, gained 1.2 percent to 13,827.43. Hong Kong's Hang Seng advanced 1 percent to 22,098.99. The Shanghai Composite Index rose 1.4 percent to 2,020.80. South Korea's Kospi added 0.5 percent to 1,923.58.

Australia's S&P/ASX 200 fell 0.2 percent to 5,039.80. Benchmarks in New Zealand and Taiwan also fell.

Better-than-expected U.S. growth in the second quarter of 2013 also gave a modest boost to investor morale. The world's No. 1 economy grew at an annual rate of 1.7 percent, the government said Wednesday, beating expectations of 1 percent for the period. Separately, a private survey from payroll company ADP showed that U.S. businesses created 200,000 jobs this month.

In addition, Eurostat figures showed the number of unemployed across the 17 European Union nations fell for the first time since April 2011, providing further hope for an eventual economic recovery in the region.

On Wednesday, the Dow Jones industrial average slipped 0.1 percent to close at 15,499.54. The Standard & Poor's 500 index dropped marginally to 1,685.73. The Nasdaq composite index rose 0.3 percent to 3,626.37.

Benchmark crude for August delivery was up 40 cents to $105.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.95 to close at $105.03 a barrel on the Nymex on Wednesday.

In currencies, the euro fell to $1.3271 from $1.3299 late Wednesday. The dollar rose to 98.25 yen from 97.75 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson


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