Global stocks flat as investors await Fed meeting results
Global stock markets were little changed Wednesday as investors took to the sidelines ahead of the U.S. Federal Reserve’s announcement of the results of its meeting.
KEEPING SCORE: European stocks opened steady. Britain’s FTSE 100 dipped 0.1 percent to 7,272.04 in early trading and Germany’s DAX added 0.1 percent to 12,567.79. France’s CAC gained 0.1 percent to 5,244.17. Wall Street futures augured a lukewarm start. Both S&P and Dow futures remained flat.
FED WATCH: At the end of its two-day meeting on Wednesday, the Federal Reserve is widely expected to announce that it will begin to reduce its enormous bond portfolio, which reached $4.5 trillion. The move will gradually increase long-term borrowing rates. While shrinking the Fed’s balance sheet is much expected, when and how the Fed will manipulate its target for short-term interest rates is less clear. After leaving its benchmark rate at a record low for seven years after the 2008 crisis, the Fed has modestly raised the rate four times since December 2015 to a still-low range of 1 percent to 1.25 percent.
ANALYST’S TAKE: “The Fed’s view will likely play the key role in driving price action. Investors are likely to look past the Fed’s interest rate decision and even the plan to shrink the Fed’s balance sheet, focusing primarily upon the Fed’s forward guidance,” said Jingyi Pan, a market strategist at IG in Singapore. “This could come in multiple forms such as the Fed’s economic projections, statement and also Fed chair Yellen’s testimony.”
ASIA’S DAY: Japan’s Nikkei 225 added 0.1 percent to 20,310.46 and South Korea’s Kospi edged down 0.2 percent to 2,412.20. Hong Kong’s Hang Seng index added 0.4 percent to 28,127.80. China’s Shanghai Composite Index gained 0.3 percent to 3,366.00. Australia’s S&P/ASX 200 fell 0.1 percent to 5,709.10. Stocks in Southeast Asia were mixed.
OIL: Benchmark U.S. crude rose 59 cents to $50.49 per barrel on the New York Mercantile Exchange. The contract fell 45 cents to settle at $49.90 a barrel on Tuesday. Brent crude, used to price international oils, gained 55 cents to $55.69 per barrel in London.
CURRENCIES: The dollar fell to 111.26 yen from 111.58 yen. The euro strengthened to $1.2015 from $1.1996.