On Wednesday Japan and Australia shares climbed, as China turned to using another targeted stimulus measure for jump-starting its economy and as a meeting of the U.S. Federal Reserve approached.
The Nikkei 225 and S&P/ASX 200
were each up 0.2% on reports that China's central bank is extending $81
billion to state-owned banks to counter a slowdown in the world's
second largest economy amid sluggish foreign direct investment and
industrial output in August.
Korea's KOSPI gained 0.7%.
U.S. stocks ascended overnight on news China will stimulate its economy as well as
on sentiments that the Federal Reserve will release a more
dovish-than-expected policy statement on Wednesday.
The Dow 30 rose 0.59 %, the S&P 500 index rose 0.75%, while the NASDAQ Composite index rose 0.75%.
This Wednesday the
Federal Reserve will announce its latest statement on monetary policy, and expectations for the U.S. central bank to cut its
monthly bond-buying program to $15 billion from $25 billion allowed for
steady trading earlier.
Investors were also anticipating to see a timetable as to when U.S. interest rates may rise.
By
afternoon trading, however, Wall Street Journal reporter Jon Hilsenrath
said in a webcast that the Fed may say rates will remain low for a
"considerable time," a phrase the bank often uses, and instead focus
more on wording the closing of its bond-buying program.
Hilsenrath's
opinion found agreement on Wall Street, as investors took up positions
betting that the Fed will try to avoid overwhelming markets by
discussing the end of stimulus programs alongside a change in forward
guidance, leaving the latter for a future policy meeting.
Elsewhere,
reports that the People Bank of China is set to provide CNY500 billion
of liquidity to the country’s five largest banks to stimulate the
economy also sent investors flocking to stocks.
Also on Tuesday,
official data showed that U.S. producer price inflation was flat last
month, compared to expectations for a 0.1% rise after a 0.1% gain in
July.
Core PPI, which excludes food, energy, and trade rose 0.1%
in August, in line with expectations, after an increase of 0.2% in July.
Energy companies, meanwhile, saw heavy demand on the coattails for rising oil prices.
OPEC
Secretary General Abdallah El-Badri reportedly said earlier the oil
bloc may trim output to boost currently slumping crude prices, which
sparked a rally in energy markets on talk total production could fall to
29.5 million barrels per day from 30 million when the group meets in
November.
Reports that Libya's El Sharara oil field saw output
reduced after rockets hit an area near a refinery fueled the rally as
well by stoking supply-disruption concerns.
Oil prices have slid in recent weeks on concerns that global supply remains ample while demand remains weak.
On
Wednesday, markets will move on the Federal Reserve's statement on
monetary policy followed by Fed Chair Janet Yellen's press conference.
Elsewhere,
the U.S. is to produce data on consumer prices, while the euro zone is
to release revised data on consumer price inflation.
