World stocks mixed as investors await Fed’s likely rate hike
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HONG KONG — European stocks rose while Asian shares slipped Wednesday as the Fed met to decide on whether to hike interest rates in view of improvements in the U.S. economy.
KEEPING SCORE: European shares rose in early trading. Germany’s DAX added 0.2 per cent to 12,016.80 and France’s CAC 40 inched up 0.1 per cent to 4,979.78. Britain’s FTSE 100 rose 0.2 per cent to 7,375.42. Wall Street indexes were poised to open higher, with Dow futures up 0.2 per cent to 20,836.00 and broader S&P 500 futures rising 0.3 per cent to 2,368.90.
FED IN FOCUS: The U.S. central bank looks set to raise interest rates by a quarter of a percentage point when policymakers wrap up their two-day meeting on Wednesday, or Thursday morning in Asia. Analysts said a rate hike, only the Fed’s third in a decade, is already priced into financial markets and investors will be looking to see what Fed chief Janet Yellen will be saying about the pace of future increases. Higher rates would make the U.S. more attractive and could siphon away capital from emerging markets and weaken their currencies.
MARKET INSIGHT: “A U.S. rate rise is now baked in to the market cake,” said Michael McCarthy, chief strategist at CMC Markets. Now, “the focus will shift to board projections. Any increase on the current indications of a further three hikes this year could disrupt equity markets.”
