US open: Markets open higher amid optimism following Fed's decision

Markets open higher on Thursday, amid renewed optimism generated by the Federal Reserve’s decision not to hike interest rates.

Construction started on new US homes plummeted 14.4% in August, according to data the US Commerce Department released on Thursday.

The annual rate of housing starts fell from 1.12m in July, the fastest pace in the last seven years, to just over 950,000, a figure slightly below the 1.03m consensus. Housing starts had surged in July, driven by the volatile multifamily sector, a sector which also led the August decline by falling 31.7% month-on-month to 313,000.

Despite August’s fall, the pace of overall construction increased 8% year-on-year, though analysts warned that the slowdown signalled some weakness in the housing market’s recovery.

There was positive news for the Labor Department, as the number of people applying for unemployment benefits hit its lowest level since July in the week ended 13 September, as it fell 36,000 to 280,000, way below the 305,000 level that had been forecast.

Meanwhile, in the week ended 6 September, the number of Americans already receiving benefits dropped 63,000 units to 2.43m, its lowest tally since May 2007.

Alibaba will begin trading on the New York Stock Exchange on Thursday at an opening price of $68, in an initial public offering that could raise over $25bn, making it the biggest ever.

United Natural Foods rose slightly after its earnings and outlook were better than analysts had initially estimated, while Pier 1 Imports plummeted as low as 11% as the company cut its forecast for the year on Wednesday.

Rite Aid Corp share fell after the drugstore chain lowered its outlook.

European markets were characterised by a lacklustre demand for the European Central Bank’s (ECB) new loans, with banks snapping up only €83bn in the ECB’s last injection of long-term funding, largely below the €133bn traders had estimated.

Berenberg’s chief economist Holger Schmieding described the outcome as "a disappointing result for the ECB".

“The low takeup of the first targeted long term refinancing operation will likely strengthen the voice of those who argue that, to really make an impact, the ECB would have to buy major amounts of sovereign bonds,” Schmieding said.

The dollar reached a six-year against the yen, but was in retreat against the euro and the pound, despite the uncertainty surrounding the outcome of the Scottish independence referendum, with the latest Ipsos MORI poll suggesting the ‘no’ movement was ahead 53% to 47%.

Five other surveys, showed pro-unionist support was at 52%, four points ahead of the campaign in favour of independence, which lifted the pound to $1.63.

Yields on the US 10-year note were up 0.02% to 2.62, while gold steadied at $1,223.60 an ounce, while Western Texas Crude rose slightly and was trading at $94.6 a barrel.