LONDON: World stock markets climbed Wednesday, with all eyes on the Federal Reserve's upcoming US interest rate decision and outlook.
The London benchmark FTSE 100 index was up 0.3 percent compared with the close on Tuesday, as traders digested a slight improvement to British quarterly growth and strength in mining stocks.
In the eurozone, the Paris CAC 40 gained 0.5 percent.
Frankfurt's DAX 30 won 0.3 percent, but Daimler shares dropped as a strong first-half performance by the company was shaded by scandals around diesel emissions and a suspected cartel.
The euro slipped back after reaching a near two-year high versus the dollar on Tuesday.
Wall Street also came off to another firm start, buoyed by strong earnings reports.
The Federal Reserve is widely expected to leave its key interest rate untouched at Wednesday's policy meeting after raising it twice this year.
- Winding down? -
Markets instead will be watching for any signals about another possible rise in the benchmark lending rate in 2017, and on when the Fed will begin winding down its multi-trillion-dollar investment holdings -- something that could have a similar effect as a rate hike.
Summing up Wednesday's action, Accendo's head of research Mike van Dulken said stock markets were "seemingly confident that this evening's Fed statement won't offer up anything to derail bullish sentiment from the earnings season, supported by a China-inspired copper rally and oil's rebound on hopes of Saudi/Russia export cuts".
Coca-Cola shares posted gains despite falling profits, a day after Wall Street received boosts from strong earnings by McDonald's and machinery giant Caterpillar.
"With optimism high that we'll see further upbeat updates later in the week from names like Boeing, Facebook and Amazon, US stock markets appear to be riding a renewed wave of exuberance, which European markets may look to try and build on after yesterday's positive session, as we head towards today's... rate decision," said Michael Hewson, chief market analyst at CMC Markets UK.
Asian stock markets mostly rose on Wednesday, led by energy giants on rising commodity prices.
- Oil up, again -
Improving demand and a weakening dollar has helped fuel a jump in copper prices to five-month peaks, while oil has also been boosted by a report pointing to lower US stockpiles.
Both crude contracts jumped three percent Tuesday with traders also cheered by news that global crude producers, meeting in Russia Monday, called for stricter adherence to an agreement to cut output.
Dealers on Wednesday are hoping for guidance from Fed boss Janet Yellen on the bank's plans for interest rates and when it will start winding in its bond holdings balance sheet, effectively sucking cash out of the market.
While there is no way of knowing what they will do, the "latest chatter suggests the (Fed policymakers) may tip their hat to September as the starting date for reducing the balance sheet", said Stephen Innes, head of Asia-Pacific trading at Oanda.
Comments
Comments are closed for this article.