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Morning market movers: Fed lifts rates as shares eye gains

The local share market is expected to open higher following positive results from global markets overnight.

Here’s a recap:

  • Dow Jones (USA) – up 1.28%
  • NASDAQ (USA): up 1.52%
  • FTSE 100 (UK): up 0.72%
  • DAX (Germany) – up 0.18%
  • EURO STOXX 50 (Europe) – up 0.16%

In the US, the Federal Reserve raised its official interest rates. For the first time in nine years, the Fed made a decision to raise its interest rates from between 0% and 0.25% to between 0.25% and 0.50%.

The Fed also raised expectations of further rate increases in the next year, implying four interest rate movements could be ahead. However, further increases will be heavily dependent upon inflation and growth in the US economy.

At 72.2 US cents, the Australian dollar remained steady following the announcement. In Europe, FTSE-listed shares of Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) closed 1.06% and 1.99% higher, respectively.

Closer to home, the Sydney Futures Exchange is forecasting the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) to open 1.1% higher.

Although materially higher interest rates in the world’s largest economy will have consequences for companies with large amounts of US-denominated debt, shares of QBE Insurance Group Ltd (ASX: IAG) and Computershare Limited (ASX: CPU) stand to benefit. Moreover, rising interest rates are a sign of an improving economy, so companies with exposure to the US economy should also stand to benefit.

In company-specific news, Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) are scheduled to hold their Annual General Meetings (AGM) today. Cimic Group Ltd (ASX: CIM), formally Leighton Holdings, have informed Devine Limited’s (ASX: DVN) shareholders that its independent directors recommend its takeover proposal, in the absence of a superior proposal.

Biotechnology business Mesoblast limited (ASX: MSB) announced a strategic update and its financial results for the three months to 30 September 2015.

Junior technology business, Nearmap Ltd (ASX: NEA), confirmed its revenue guidance run-rate for the month of November, and Caltex Australia Limited (ASX: CTX) released its full-year profit outlook.

In broker news, Bell Potter has raised its price target on shares of Domino’s Pizza Enterprises Ltd. (ASX: DMP) 18% to $65; and Primary Health Care Limited (ASX: PRY) has had its price target cut 20% to $2.80 by analysts at Deustche Bank, according to Dow Jones Newswires.

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Motley Fool writer/analyst Owen Raszkiewicz owns shares of Nearmap and Computershare. 

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Computershare. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Motley Fool contributor Owen Raszkiewicz has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Computershare. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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