Stock markets waver before Fed as US lawmakers haggle

LONDON: Global equities wavered Wednesday as investors kept a nervous eye on Washington, hoping the Federal Reserve will extend its dovish monetary policy while lawmakers struggle to hammer out a new stimulus package.

London stocks added 0.4 percent and Paris won 0.7 percent, while Frankfurt was marginally lower at the half-way stage.

"Stock markets are mixed today as traders look ahead to the Federal Reserve's announcement later today," said CMC Markets analyst David Madden.

"There has been a lot of chatter the Fed will reiterate the point that rates will stay ultra-low for years to come. The central bank has already been extremely aggressive with regards its stimulus packages, and there is a view they will do what it takes to cushion the blow of the health crisis."

Gold held steady after hitting record highs for two straight days, though observers say uncertainty over the spread of the coronavirus, a weaker dollar and geopolitical worries could soon push the metal to fresh peaks above $2,000 per ounce.

With the COVID-19 pandemic showing little sign of being fully controlled until a vaccine is created, economic recoveries and a months-long global markets rally are sputtering, putting pressure on governments and central banks to add to their already monumental financial support.

The Federal Reserve concludes its latest policy meeting later in the day, and while it is not expected to announce any new measures there are hopes it will offer new guarantees to keep the stimulus in place for an extended period.

The bank dropped interest rates to zero in the early days of the pandemic, and said they will stay there until the recovery is firmly in place. It has also flooded the financial system with cash and constructed a web of loan programmes for businesses, as well as state and local governments.

Wall Street provided a weak lead for Asia and Europe, with traders spooked by below-par earnings from top firms, particularly McDonald's, which saw a steep drop in profits owing to poor sales.

There are also festering concerns about US lawmakers' struggle to push through a new support programme for the world's top economy, with their previous multi-trillion-dollar scheme running dry.

"Republicans and Democrats are struggling to reach an agreement over the next relief package, causing optimism to stutter," noted City Index analyst Fiona Cincotta.

Key figures around 1100 GMT

London - FTSE 100: UP 0.4 percent at 6,150.60 points

Frankfurt - DAX 30: DOWN 0.1 percent at 12,828.42

Paris - CAC 40: UP 0.7 percent at 4,964.43

EURO STOXX 50: FLAT at 3,305.29

Tokyo - Nikkei 225: DOWN 1.2 percent at 22,397.11 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 24,883.14 (close)

Shanghai - Composite: UP 2.1 percent at 3,294.55 (close

New York - Dow: DOWN 0.8 percent at 26,379.28 (close)

Euro/dollar: UP at $1.1749 from $1.1716 at 2100 GMT

Dollar/yen: DOWN at 104.89 yen from 105.09 yen

Euro/pound: DOWN at 91.51 pence from 91.79

Gold: DOWN 0.2 percent at $1,954.71 per ounce

West Texas Intermediate: UP 1.0 percent at $41.46 per barrel

Brent North Sea crude: UP 1.3 percent at $43.79