Sep 17, 2014 4:41 AM
World stocks mostly higher ahead of Fed statement
The Associated Press
KUALA LUMPUR, Malaysia (AP) World stock markets were mostly higher Wednesday, buoyed by hopes that the Federal Reserve will not speed up plans to raise interest rates and reports that China is providing extra liquidity to major state banks.
KEEPING SCORE: France's CAC 40 was up 0.4 percent at 4,425.75 and Germany's DAX added 0.3 percent to 9,665.27. Britain's FTSE 100 rose 0.1 percent to 6,798.69. Wall Street was set for a flat open. Dow Jones and S&P 500 futures were both barely changed.
FED WATCH: Some investors are hoping that the statement from the Fed meeting that ends Wednesday will maintain the phrase "considerable time" to remain in its plan to raise interest rates. Some analysts said the recent rally in the U.S. dollar, which may dampen some areas of the U.S. economy, has become a reason for the Fed to turn cautious. The Fed has held the rate close to zero for more than five years, and stocks have surged against that backdrop.
CHINA BANKS: Sentiment was boosted by news reports that China's central bank will inject a total of 500 billion yuan ($81 billion) into the five biggest state banks over three months. Additional financial system liquidity would build on targeted measures to shore up growth, amid a bout of weak economic data. There was no official confirmation of the reports.
ASIA'S DAY: Tokyo's Nikkei 225 fell 0.1 percent to 15,888.67 and Hong Kong's Hang Seng surged 1 percent to 24,376.41. China's Shanghai Composite added 0.5 percent to 2,307.89 and Seoul's Kospi gained 1 percent to 2,062.61. Australia's S&P/ASX 200 lost 0.7 percent to 5,407.30. Markets in Taiwan, India and Southeast Asia were higher.
THE QUOTE: Chinese support for banks if confirmed "is likely to snap Asian equities out of their Fed-induced slumber," said Evan Lucas, market strategist with IG in Australia. "However I again reiterate that the Fed is still the main driving force in the market currently."
ENERGY: Benchmark U.S. crude was down 31 cents to $94.59 a barrel in electronic trading on the New York Mercantile Exchange. It rose $1.96 to close at $94.88 a barrel on Tuesday.
CURRENCIES: The euro rose to $1.2964 from $1.2957 late Tuesday. The dollar stayed at six year highs against the yen, rising to 107.25 yen from 107.14 yen.