People are reflected on an electronic stock board along with global stock indexes at a securities firm in Tokyo Wednesday, Dec. 16, 2015.
Advertisement
Oil prices retreated in Asian trading hours on Wednesday following fresh indications of growing oversupply ahead of the US Federal Reserve s long-awaited decision on interest rates.
“We wouldn’t be surprised if we see our market get sold off towards the close as investors look to close their positions ahead of the USA interest rate decision”, said the chief executive of Australian Stock Report, Anthony D’Paul.
Bank stocks, which will benefit from higher rates, led the market with a 2.7 percent advance on the S&P financial sector index.
In early European trade Wednesday London climbed 0.30 percent, Frankfurt gained 0.25 percent and Paris was up 0.15 percent.
US stocks traded higher Tuesday, helped by some stabilization in oil prices, as the Federal Reserve was set to begin its key two-day meeting.
Ahead of the opening bell, futures for the Dow Jones leaped 80 points, or 0.5%, to 17,334, futures for the S&P 500 gained 12.5 points, or 0.6%, to 2,002. The Nasdaq composite index gained 43.13 points, or 0.9 per cent, to 4,995.36.
The case for a U.S. rate hike, which was already seen as substantial, got another boost Tuesday as the Labor Department reported its consumer price index was flat in November, with the core CPI (Other OTC: CPICQ – news) up 0.2 percent when volatile food and energy prices were stripped out.
Benchmark 10-year Treasury notes lost 14/32 in price to yield 2.2729 percent.
MEDIA STOCKS: Disney rose $3.51, or 3.2 per cent, to $112.86 after the premiere of “Star Wars: The Force Awakens”.
Oil reversed early falls to stem a six-day slide as bargain hunters moved in after crude dropped to its lowest level since December 2008 in the prior session.
Emerging market stocks improved. Natural gas has been falling as traders anticipate weaker demand for home heating due to the unseasonably warm winter weather in the U.S. A rate hike would signal confidence in the US economy, but some investors worry it may slow growth.
The U.K.’s FTSE 100 index UKX, +0.81% climbed 0.7% to 6,058.09, buoyed by the benchmark’s oil firms.
In Europe, the Stoxx 600 Index finished the session with a 2.9 percent jump from the previous close.
Investors say they will focus on the language in the Fed’s Wednesday policy statement and news conference for hints on the pace and timing of rate increases.
Meanwhile, U.S. builder confidence in the market for newly constructed single-family homes remained relatively flat in December, dropping one point to 61 on the National Association of Home Builders/Wells Fargo Housing Market Index. Mozambique in October raised its rates for the first time since 2011.
Woodside Petroleum in Sydney edged down 0.8 percent and Santos shed 1.8 percent, while Inpex in Tokyo was more than 1 percent off. Australia’s S&P/ASX 200 added 2.4 percent.
A major Chinese bank placed a “sizable bid” for yuan at around 6.53, triggering the rebound in the offshore exchange rate, said Ryan Lam, the Hong Kong-based head of research at Shanghai Commercial Bank Ltd. “Trading will be thinner around Christmas which means the PBOC can achieve its goal even with small-scale interventions”.
Advertisement
CURRENCIES: The euro fell to $1.0918 from $1.0998.
