Global Shares Mixed Ahead of Fed Report01/26 04:56
Global shares were mixed on Wednesday, with many investors staying on the
sidelines ahead of an update on how aggressively the Federal Reserve will
TOKYO (AP) -- Global shares were mixed on Wednesday, with many investors
staying on the sidelines ahead of an update on how aggressively the Federal
Reserve will tackle inflation.
France's CAC 40 added nearly 1.0% in early trading to 6,903.90, while
Germany's DAX gained 1.2% to 15,309.64. Britain's FTSE 100 rose 1.2% to
7,461.86. The future for the Dow industrials climbed 0.3% to 34,287.00. The S&P
500 future was 0.4% higher at 4,367.50.
Stocks have gyrated this week as markets focused on whether the U.S. central
bank will clarify just how fast it plans to tighten credit and potentially slow
the economy. The Fed's two-day meeting wraps up on Wednesday.
At the same time, tensions over the Russia and Ukraine tensions continue to
Ukraine's leaders have reassured their country that an invasion from
neighboring Russia is not imminent but acknowledged the threat is real and
received a shipment of U.S. military equipment to shore up their defenses.
Moscow has denied it is planning an assault, but it has massed an estimated
100,000 troops near Ukraine in recent weeks and is holding military drills at
multiple locations in Russia. That has led the United States and its NATO
allies to rush to prepare for a possible war.
"Market volatility remains elevated as investors are still feeling jittery
over a very tense Ukraine-Russia situation, a whole range of inflationary
issues that include a potentially aggressive Fed and a global chip problem that
just won't get any better," Edward Moya of Oanda said in a commentary.
Japan's benchmark Nikkei 225 slipped 0.4% to finish at 27,011.33. South
Korea's Kospi edged down 0.4% to 2,709.24. Hong Kong's Hang Seng was little
changed, gaining less than 0.1% to 24,245.17, while the Shanghai Composite rose
0.7% to 3,455.67. Australian markets were closed for a holiday.
Some on Wall Street worry that the Fed may signal it plans a half-point
increase in its key rate. There is also concern that Fed Chair Jerome Powell
could suggest that the central bank will raise rates more times this year than
the four hikes most economists are expecting.
Higher inflation has been squeezing businesses and consumers, and the Fed is
expected to combat it in 2022 by raising interest rates. Investors fear that
the Fed could either be moving too late or could be too aggressive.
The pandemic still hovers over the economy, threatening to crimp progress
with every new wave of infections.
In China, reported local COVID-19 cases have dropped but some people are
wary of infections spreading with next week's Lunar New Year holiday and the
Beijing Winter Olympics, which begin Feb. 4.
The International Monetary Fund cited the omicron variant as the reason it
has downgraded its forecast for global economic growth this year.
That is "consistent with disrupted and dampened recovery out of the
pandemic," Mizuho Bank said in a report. "Rolling supply-chain kinks, troubling
escalation and broadening of inflation, and stuttered re-opening due to the
omicron variant of (COVID) are in the line-up of 'usual suspects' for the
dimmer recovery in 2022," it said.
In energy trading, benchmark U.S. crude added 20 cents to $85.80 a barrel in
electronic trading on the New York Mercantile Exchange. It jumped $2.29 to
$85.60 a barrel on Tuesday.
Brent crude, the basis for pricing international oil, picked up 29 cents to
$88.47 a barrel.
In currency trading, the U.S. dollar rose to 114.10 Japanese yen from 113.87
yen. The euro cost $1.1299, down from $1.1300.