Asia Morning Call-Global Markets | Reuters

Jan 27 (Reuters) – —————————————————————————————-

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** indicates closing price

All prices as of 18:20 GMT

EQUITIES

GLOBAL – U.S. stocks rebounded in initial trading Wednesday ahead of a Federal Reserve policy update, while ongoing tension between Russia and Ukraine helped pushed oil to a seven-year high.

The MSCI world index (.MIWD00000PUS) rose 1.22%, European shares (.STOXX) climbed 1.98% and Britain’s FTSE 100 .FTSE gained 1.95%.

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NEW YORK – Wall Street’s main indexes climbed on Wednesday after two turbulent sessions and ahead of the outcome of a Federal Reserve policy meeting, with a stellar outlook from Microsoft boosting technology stocks.

The Fed is due to update its policy plan at 2 p.m. EST (1900 GMT) after a two-day meeting. A first rate increase is seen in March, and three more quarter-point increases are expected by year-end.

At 11:23 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 355.11 points, or 1.04%, at 34,652.84, the S&P 500 (.SPX) was up 66.12 points, or 1.52%, at 4,422.57, and the Nasdaq Composite (.IXIC) was up 291.15 points, or 2.15%, at 13,830.45.

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LONDON – European shares extended gains to record their best session since early December on Wednesday as recently bruised energy, travel and technology stocks recovered ahead of a U.S. Federal Reserve monetary policy meeting.

The pan-European STOXX 600 (.STOXX) rose 1.7%, with all sectors in positive territory, marking the second straight session of gains after it fell by about 4% on Monday.

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TOKYO – Japan’s Nikkei index ended lower on Wednesday, dragged down by technology heavyweights after their U.S. peers slumped overnight on concerns over an increasingly hawkish Federal Reserve and tensions surrounding Ukraine.

The Nikkei share average (.N225) closed down 0.44% at 27,011.33, after touching a 13-month low earlier in the session. The broader Topix (.TOPX) fell 0.25% to 1,891.85.

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SHANGHAI – China stocks closed up on Wednesday, with the blue chips rebounding from a 15-month low hit in the previous session, after state media urged financial institutions and pension funds to help stabilise markets.

The blue-chip CSI300 index (.CSI300) rose 0.7% to end at 4,712.31, while the Shanghai Composite Index (.SSEC) gained 0.7% to 3,455.67.

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AUSTRALIA – New Zealand shares snapped a five-session losing streak on Wednesday in thin trading volumes, with investors awaiting a U.S. Federal Reserve policy decision for further direction, while Australian markets were closed for a public holiday.

The S&P/NZX 50 index (.NZ50) rose 0.5% to 12,185.65 in its best session since Jan. 5. The benchmark fell 0.5% on Tuesday.

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SEOUL – South Korean shares fell for a fourth straight session on Wednesday as investors awaited a U.S. Federal Reserve decision that could signal an interest rate hike in March. The Korean won strengthened, while the benchmark bond yield fell.

The benchmark KOSPI (.KS11) fell 11.15 points, or 0.41%, to 2,709.24, as of 0632 GMT.

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FOREIGN EXCHANGE

NEW YORK – The dollar held below a 2-1/2 week high on Wednesday as risk sentiment stabilized hours before policymakers at the Federal Reserve are widely expected to indicate their readiness to start raising interest rates starting in March.

The currency briefly touched a Jan. 7 high of 96.30 against a basket of currencies on Tuesday before ending below that level.

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SHANGHAI – China’s yuan finished Wednesday’s domestic trading session at the highest level in nearly four years against the dollar and a 6-1/2-year peak versus its trading basket, while markets continued to gauge authorities’ attitude towards recent gains.

The onshore spot yuan ended its domestic trading session at 6.3219 per dollar, 38 pips firmer than the previous late night close, marking the strongest finish since April 25, 2018.

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AUSTRALIA – Markets were closed on Wednesday on account of a public holiday

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SEOUL – The Korean won strengthened on Wednesday, while the benchmark bond yield fell.

The won was quoted at 1,197.7 per dollar on the onshore settlement platform , 0.08% higher than its previous close at 1,198.6.

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TREASURIES

NEW YORK – U.S. Treasury yields across the curve were flat to slightly lower on Wednesday, moving within narrow ranges, as investors consolidated positions ahead of a Federal Reserve policy decision that will likely signal an interest rate increase in March.

In mid-morning trading, the benchmark U.S. 10-year yield was slightly lower at 1.7815 .

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LONDON – Euro zone government bond yields rose on Wednesday over investor fears the Federal Reserve might tighten its monetary policy faster than expected but any sell-off was limited as tensions over Ukraine dampened risk sentiment.

Germany’s 10-year government bond yield, the benchmark of the bloc, rose 1.5 basis points to -0.068%.

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TOKYO – – Japanese government bond yields were flat on Wednesday, as investors awaited the U.S. Federal Reserve to update its policy plan, likely fleshing out timing on expected rate hikes.

The 10-year JGB yield was flat at 0.135% and the 20-year JGB yield was steady at 0.525%.

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COMMODITIES

GOLD – Gold fell 1% on Wednesday as the dollar firmed with investors awaiting the U.S. Federal Reserve’s decision on interest rates, while supply concerns fuelled by tensions over Ukraine drove an 8% rally in palladium.

Spot gold dropped 1% to $1,829.65 per ounce at 12:19 p.m. ET (1719 GMT). U.S. gold futures fell 1.1% to $1,831.40.

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IRON ORE – Iron ore futures in top steel producer China jumped more than 3% on Wednesday, underpinned by concerns over supply as traders digested reports of lower import arrivals and shipments departing Australia and Brazil.

The most-traded May contract for the steelmaking ingredient on China’s Dalian Commodity Exchange ended daytime session 3.4% higher at 776 yuan ($122.79) a tonne, after touching 776.50 yuan, its highest since Oct. 13.

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BASE METALS – Copper prices clambered higher on Wednesday as investors bet the U.S. central bank would not raise rates too quickly, allowing economic growth and metals demand to keep increasing.

Three-month copper on the London Metal Exchange had gained 1.6% to $9,955 a tonne by 1715 GMT, building on its 0.8% rise in the previous session.

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OIL – Oil touched $90 a barrel for the first time in seven years on Wednesday, supported by tight supply and rising political tensions in Russia that raised concerns about further disruption in an already-tight market.

Brent crude rose $2.02, or 2.3%, to $90.22 by 11:21 a.m. EST (1621 GMT), the first time the global benchmark has broken $90 since October 2014. U.S. West Texas Intermediate (WTI) crude was up $2.09, or 2.4%, to $87.69.

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PALM OIL – Malaysian palm oil futures rose for a second straight session on Wednesday, supported by concerns over lower production and stronger rival oils.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.93% at 5,331 ringgit ($1,272.32) per tonne at the close of trade, regaining some of the 0.42% drop in the overnight trade.

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RUBBER – Japanese rubber futures snapped a three-day losing streak on Wednesday, after hitting a four-week low in the previous session, as investors looked for bargains ahead of the U.S. Federal Reserve’s policy update.

The Osaka Exchange rubber contract for July delivery , finished 2.1 yen higher at 239.0 yen ($2.1) per kg. The new benchmark gained 5.8 yen, or 2.5%, from Tuesday’s close of June contract, the previous benchmark.

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Bengaluru Bureau; +91 80 6749 1130

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