LONDON: Emerging market stocks jumped the most in two months and metals rallied after the United States Federal Reserve unexpectedly refrained from cutting monetary stimulus. US shares retreated after benchmark indexes reached records on Thursday.
The MSCI Emerging Markets Index rallied 2.4 per cent at 4pm in New York as Turkish shares jumped the most in three years.
The MSCI All-Country World Index climbed to the highest level since 2008 while the Standard & Poor's 500 Index slipped 0.2 per cent after rallying 1.2 per cent on Thursday.
The cost of insuring high-yield European company bonds against losses fell to the lowest since May 2011.
US policy makers said yesterday they want more evidence of an economic recovery before paring its US$85 billion (RM280.5 billion)-a-month quantitative-easing programme.
Fed chairman Ben. S. Bernanke, who said in June the central bank may start curbing stimulus this year and end it in 2014 if the economy finally achieves sustainable growth, said Thursday the central bank must determine its policies based on "what's needed for the economy," even if it surprises markets.
"Bernanke had threatened to take away the punchbowl and bring the QE-party to an end," Kit Juckes, a global strategist at Societe Generale SA in London, said in a report yesterday. "But he's changed his mind, found more happy juice, and told us all to 'Party on, dude!'"
The MSCI Emerging Markets Index pared its decline for the year to 2.9 per cent.
The Borsa Istanbul National 100 Index extended its gain from a low on August 28 to more than 20 percent, the common definition of a bull market.
The Jakarta Composite Index rallied 4.7 per cent, the most in almost two years, while Brazil's Ibovespa slipped 1.3 per cent after jumping 2.6 per cent on Thursday.
India's Sensex rose 3.4 per cent and the rupee rallied 2.5 per cent, paring this year's drop to 11 per cent. The ringgit appreciated 2.6 per cent, the most since 1998.
Global funds were boosting holdings of Asian assets in the run-up to Thursday's Fed announcement and this trend is likely to be "reinforced" in coming trading sessions, according to Mitul Kotecha, the global head of foreign-exchange strategy at Credit Agricole SA in Hong Kong. Bloomberg