Fed rate wording boosts world stock markets

Stock markets across the world powered higher yesterday, sweeping aside worries about a flagging global economy after the U.S. Federal Reserve said it would remain "patient" in its approach to raising interest rates.

The positive results of the Fed's decision were also seen in the Turkish financial markets. Borsa Istanbul's BIST-100 index closed the day at 82.895, increasing 2.57 percent as the U.S. dollar continues to slide against the TL.

The dollar was around 2.3140, decreasing 1.01 percent after hitting a historic low of 2.42 per dollar on Tuesday. Speaking to Daily Sabah, economist Taha Meli Arvas said that despite robust numbers in manufacturing and unemployment, the total U.S. employment participation rate is at its lowest percentage in 40 years, which means that of the total number of Americans that can work, only about 62.8 percent are working.

"The participation rate is the one major metric that continues to fall in the United States since the 2008 'Great Recession.' Something is broken in the U.S. economy. That something needs to be changed before interest rates continue to rise" said Arvas.

France's CAC 40 jumped 2.2 percent to 4,200.83 and Germany's DAX surged 1.9 percent to 9,727.83. Britain's FTSE 100 added 0.7 percent to 6,383.25. Wall Street was poised to extend Wednesday's gains. Dow futures climbed 0.8 percent to 17,423 and S&P 500 futures rose 0.8 percent to 2,024.60.

The world's most powerful central bank is edging closer to raising interest rates from record lows given a strengthening U.S. economy. But it will be "patient" in deciding when to do so. That was the message sent Wednesday as the Fed ended a meeting amid heightened expectation about a forthcoming rate increase.

At a news conference, Chair Janet Yellen said she foresaw no rate hike in the first quarter of 2015. "With a week to go to Christmas, Santa seems to have finally arrived for global equities," said Stan Shamu, market strategist at IG in Melbourne, Australia. "It was always important for the Fed to get the language right so as not to spook markets at such a fragile time and it seems it has done just that."

Japan's Nikkei 225 catapulted 2.3 percent to 17,210.05 and Hong Kong's Hang Seng added 1.1 percent to 22,832.21. Australia's S&P/ASX 200 rose 1 percent to 5,210.80. Markets in Taiwan, India and Southeast Asia also gained. China's Shanghai Composite fell 0.1 percent to 3,057.52. Seoul's Kospi was down 0.1 percent at 1,897.50.

Russia remained in focus over concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year as the oil price slump and Western sanctions over Russia's actions in Ukraine hit the Russian economy. After falling again Wednesday, the ruble remained volatile but recovered somewhat and was at 61.90 to the dollar.

Benchmark U.S. crude was up 93 cents at $57.40 a barrel in electronic trading on the New York Mercantile Exchange. In Wednesday's Nymex floor trading, it closed up 54 cents to $56.47 a barrel. Oil has been on a wild downhill ride since June when it was over $100 a barrel. Overproduction and weak demand are behind the fall in global oil prices. Brent crude, a benchmark for international oils, jumped $2.67 to $62.66 a barrel. The euro fell to $1.2314 from the previous day's closing level of $1.2329. The dollar fell to 118.63 yen from 118.83 yen.

CONTRIBUTED BY AP