Global Stocks Retreat on Thursday

BEIJING (AP) -- Global stocks and U.S. futures sank Thursday after the Federal Reserve indicated its benchmark interest rate will stay close to zero at least through 2023 but announced no additional stimulus plans.

London and Frankfurt opened lower. Shanghai, Tokyo, Seoul and Hong Kong all retreated.

The Fed said Wednesday it won't raise interest rates until inflation reaches 2%, which the U.S. central bank's own projections say won't happen until late 2023. Chairman Jerome Powell promised the Fed “we will not lose sight" of unemployed Americans but gave no indication of new stimulus.

Markets “hoped for the Fed to put policy money where the mouth is” but "ended up a tad disappointed,” Mizuho Bank said in a report. The Fed was “long on talk and short on action.”

Also Thursday, the Japanese central bank left its interest rates unchanged and gave no sign of possible stimulus plans.

In early trading, the FTSE 100 in London lost 0.7% to 6,038.88 and the DAX in Frankfurt shed 0.7% to 13,159.84. The CAC 40 in Paris lost 0.8% to 5,035.80.

On Wall Street, the future for the benchmark S&P 500 index fell 1.2% and that for the Dow Jones Industrial Average lost 1%.

On Wednesday, the S&P 500 lost 0.5% while the Dow gained 0.1%. The Nasdaq composite fell 1.3%.

In Asia, the Shanghai Composite Index lost 0.4% to 3,270.44 and the Nikkei 225 in Tokyo sank 0.7% to 23,319.37. The Hang Seng in Hong Kong retreated 1.6% to 24,340.85.

The Kospi in Seoul shed 1.2% to 2,406.17 while Sydney's S&P-ASX 200 declined 1.2% to 5,883.20.

India's Sensex retreated 0.5% to 39,088.73. New Zealand and Southeast Asia markets all retreated.

Global markets have recovered most of this year's losses, boosted by central bank infusions of credit into struggling economies and hopes for a coronavirus vaccine.

Forecasters warn, however, that the recovery might be too big and fast to be supported by uncertain economic activity.

U.S. investors are counting on Congress for a new support package after additional unemployment benefits that help to support consumer spending expired, but legislators are deadlocked on its possible size.

Powell said the U.S. economy has recovered more quickly than expected.

The Fed forecast the economy will shrink 3.7% this year, an improvement over its June outlook of a 6.5% drop. The Fed projected an unemployment rate at the end of the year of 7.6% instead of the 9.3% projected in June.

“A full economic recovery is unlikely until people are confident that it is safe to re-engage in a wide variety of activities,” Powell said.

In energy markets, benchmark U.S. crude oil for October delivery lost 24 cents to $39.92 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.88 on Wednesday to $40.16. Brent crude oil for November delivery shed 21 cents to $41.01 per barrel in London. It gained $1.69 the previous session to $42.22.

The dollar declined to 104.73 yen from Wednesday's 105.01 yen. The euro edged up to $1.1803 from $1.1801.