Asian stocks hope for calmer China markets, wary of Fed

MSCI's broadest index of Asia-Pacific shares outside Japan firms 0.5%

Asian shares attempted a rebound on Wednesday on hopes that Beijing could stem the rout in its markets without damage to the economy, though caution was the watchword ahead of a policy decision from the US Federal Reserve.

Australia's main index rose 0.9% in early trade, while Japan's Nikkei flitted in and out of positive territory. MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.5%.

Sentiment was soothed a little when Chinese regulators said they were prepared to buy shares to stabilise stocks and the central bank hinted at further easing.

Yet investors were understandably wary of a market that, without warning, fell over 8% on Monday.

 

The CSI300 index of the largest listed companies in Shanghai and Shenzhen had ended on Tuesday just 0.2% lower, while the Shanghai Composite lost 1.7%. Both indexes had slumped as much as 5% at one point. 

On Wall Street, the Dow ended on Tuesday with gains of 1.09%, while the S&P 500 rose 1.24% and the Nasdaq 0.98%. 

Not faring so well was Twitter , which sank 11% in extended trade after the microblogging company said its monthly average users grew at the slowest pace since it went public in 2013.

The Fed ends a two-day policy meeting later on Wednesday with markets divided on whether it will take a hawkish or dovish stance, while some suspect it might chose to do neither. No move on rates is expected this week.

In recent congressional testimony, Fed Chair Janet Yellen neither ruled out a September hike nor guided the market towards thinking it was a done deal.

"We think the upcoming FOMC statement will reflect this non-committal approach," said Tom Porcelli, chief US economist at RBC Capital Markets.

"In other words, there will be no explicit tweak to the guidance signalling a hike is imminent."

At most, the Fed might sound a little more positive on the economy and describe risks to the outlook as balanced rather than "nearly" balanced, Porcelli added.

In currency markets, investors seemed to decide it was safer not to be short of the US dollar ahead of the policy statement at 1800 GMT.

The dollar was up at 123.57 yen >, from a low of 123.04 on Tuesday, while the euro inched down to $1.1063 >.

Against a basket of currencies, the dollar was off a touch at 96.628 

In energy markets, oil prices were subdued ahead of official data on US stockpiles. 

Brent futures were down 31 cents at $52.99 a barrel and near their lowest since February. US crude futures slipped 24 cents to $47.74 a barrel.