Asian stock markets were higher Thursday ahead of the Bank of England’s upcoming announcement of its monetary policy decision. Oil prices extended gains.
Japan’s Nikkei 225 rose 0.3 percent to 16,133.30, erasing losses in the morning session. South Korea’s Kospi added 0.2 percent to 1,998.62 and Hong Kong’s Hang Seng index added 0.6 percent to 21,861.48. But China’s Shanghai Composite Index dropped 0.2 percent to 2,972.66. Stocks in Taiwan, Singapore, Indonesia and other Southeast Asian markets were higher.
The Bank of England is widely expected to unveil stimulus measures including a rate cut when it announces its monetary policy decision later Thursday after Asian markets close. Some analysts also expect the bank will announce the creation of billions in new money as early indicators since the U.K. referendum to leave the European Union suggest that the economy is contracting at its sharpest rate since 2009. Analysts expected increased volatility in the foreign exchange market ahead of the decision.
“The question is, not so much, if the BoE will ease policy, but rather how the BoE will choose to deliver policy easing,” Mizuho Bank wrote in a daily commentary. If the bank’s decision falls short of market expectations, “there is a risk of markets being disappointed.”
U.S. stocks edged higher on Wednesday as the big gains in the price of oil boosted energy companies. The Dow Jones industrial average broke a seven-day losing streak and added 0.2 percent to 18,355. The Standard & Poor’s 500 index gained 0.3 percent to 2,163.79. The Nasdaq composite rose 0.4 percent to 5,159.74.
Benchmark U.S. crude climbed 29 cents to $41.12 per barrel in New York. The contract jumped $1.32, or 3.3 percent, to close at $40.83 on Wednesday after the U.S. government said stockpiles of gasoline shrank by more than 3 million barrels last week. Brent crude, which is used to price international oils, rose 19 cents to $43.29 a barrel in London.
The dollar weakened to 101.24 yen from 101.28 yen while the euro fell slightly to $1.1143 from $1.1148.