Asian stocks post cautious gains ahead of Fed statement
TOKYO (AP) — Asian stock markets mostly made modest gains Wednesday as the recent plunge in Chinese shares kept investors on edge and attention turned to a Federal Reserve meeting that might give clues about the timing of a U.S. interest rate hike.
KEEPING SCORE: China's Shanghai Composite Index was up 0.5 percent to 3,680.91 and Hong Kong's Hang Seng added 0.2 percent to 24,549.21. Japan's Nikkei 225 edged down 0.6 percent to 20,210.96. South Korea's Kospi rose 0.5 percent to 2,049.77. Benchmarks in Singapore and Taiwan fell while Australia, Philippines and Indonesia rose.
FED MEETING: Traders are focusing on the U.S. Federal Reserve as they try to assess when interest rates will rise. Fed policymakers started a two-day meeting Tuesday. Many expect the Fed to raise interest rates for the first time since the global financial crisis in either September or December. Ultra-low interest rates have spurred stock markets for several years.
CHINA JITTERS: Alarm over the sharp fall in Chinese shares has abated somewhat after the Shanghai index steadied following Monday's 8.5 percent dive. Many market commentators say 3,500 is a level for the index that Chinese authorities will aggressively defend. The economic effects of the past month's slide in Chinese shares is likely to be limited as a low proportion of households are stock investors and levels of private savings are among the highest in the world.
THE QUOTE: "The major issue for investors is the level of growth and demand in China's overall economy rather than the stock market itself," said Ric Spooner, chief analyst at CMC Markets in Sydney. But he expects "many will remain cautious until there is some confirmation of a definite trend change in this market with prices continuing to move clearly away from yesterday's support levels."
EARNINGS SEASON: Investors are watching for earnings reports and forecasts. Wall Street was cheered by strong results from UPS, Ford and other big companies. Lowered earnings forecasts from some companies, such as major Japanese robotics company Fanuc, sent the Nikkei down.
WALL STREET: The Dow Jones industrial average rose 189.68 points, or 1.1 percent, to 17,630.27, ending near its high for the day. The Standard & Poor's 500 rose 25.61 points, or 1.2 percent, to 2,093.25 and the Nasdaq composite rose 49.43 points, or 1 percent, to 5,089.21.
ENERGY: Benchmark U.S. crude was down 14 cents to $47.84 a barrel in electronic trading on the New York Mercantile Exchange. It rose 59 cents to close at $47.98 a barrel in New York on Tuesday. Brent crude was down 16 cents at $53.14 a barrel in on ICE futures exchange in London.
CURRENCIES: The euro rose to $1.1081 from $1.1068 in the previous trading session. The dollar slipped to 123.40 yen from 123.57 yen.