World stocks rebound as Fed rate decision looms

HONG KONG (AP) — Most world stock markets rose Wednesday, as investors took a break from the sell-off over the past week to await the Fed’s upcoming decision on interest rates.

KEEPING SCORE: European stocks rose in early trading, with France’s CAC 40 climbing 1.1 percent to 4,175.76 and Germany’s DAX up 0.6 percent to 9,578.57. Britain’s FTSE 100 added 0.8 percent to 5,973.43. U.S. stocks were poised to open higher. Dow futures gained 0.2 percent to 17,606.00 and broader S&P 500 futures crept up 0.1 percent to 2,068.70.

FED IN FOCUS: The Federal Reserve wraps up a scheduled two-day policy meeting later Wednesday, with a decision on interest rate policy expected after Asian markets close. The U.S. central bank had been expected to raise interest rates but now most analysts are expecting it to stand pat after some weak economic data, including the most recent monthly jobs report, raised some doubts about the recovery in the world’s largest economy. Bank of Japan officials, who started their own two-day policy meeting, will also be awaiting the Fed’s review and its effect on the markets.

ASIAN SCORECARD: Japan’s benchmark Nikkei 225 index gained 0.4 percent to finish at 15,919.58 while South Korea’s Kospi dipped 0.2 percent to 1,968.83. Hong Kong’s Hang Seng rose 0.4 percent to 20,467.52 while the Shanghai Composite Index in mainland China jumped 1.6 percent to 2,887.21. Australia’s S&P/ASX 200 lost 1.1 percent to 5,147.10. Benchmarks in Taiwan and New Zealand rose but in Southeast Asia they were mixed.

CHINA INDEX: Shanghai shares were volatile and the yuan slid after global stock benchmark provider MSCI put off including mainland Chinese stocks in its widely followed Emerging Markets Index. It said China needs to make its market more accessible and closer to international standards. Inclusion of China’s domestic stocks, known as “A-shares,” could have attracted more foreign investment as fund managers rebalanced portfolios to reflect the changes. Following the decision, Shanghai’s benchmark opened 1 percent lower before quickly reversing losses to advance strongly, raising suspicions that Beijing was stepping in to support buying. Meanwhile, the Chinese central bank set its daily yuan rate 210 basis points lower at 6.6001 to the dollar, the weakest since January 2011.

QUOTEWORTHY: “It’s definitely possible that we’re seeing state intervention today,” said Angus Nicholson at IG Markets in Sydney. With investor jitters already heightened over Britain’s June 23 referendum on European Union membership, “a major sell-off in Chinese markets could have accelerated into something much more concerning. So you can understand why the government may have tapped the ‘National Team’ on the shoulder today,” Nicholson said, referring to Chinese government entities likely behind the stock buying.

ENERGY: Benchmark U.S. crude oil futures dropped 30 cents to $48.19 a barrel in electronic trading on the new York Mercantile Exchange. The contract dropped 39 cents to settle at $48.49 per barrel on Tuesday. Brent crude, used to price international oils, fell 35 cents to $49.48 per barrel in London.

CURRENCIES: The dollar rose to 106.29 yen from 106.02 yen. The euro edged up to $1.1221 from $1.1214.