BEIJING – Chinese stocks sank again Wednesday but other Asian markets rose following Wall Street’s gain as investors looked ahead to the U.S. Federal Reserve’s latest statement on interest rates and the economic outlook.
KEEPING SCORE: China’s Shanghai Composite Index shed 2.4 per cent to 2,682.65, adding to Tuesday’s 6.4 per cent loss. The Chinese benchmark has now given up almost all the gains made since December 2014. Japan’s Nikkei 225 rose 2.6 per cent to 17,142.52 and Hong Kong’s Hang Seng was up 0.8 per cent at 19,015.18. South Korea’s Kospi gained 1.4 per cent to 1,897.87 and India’s Sensex advanced 0.4 per cent to 24,520.52. Markets in Taiwan and Southeast Asia also gained. Australia’s S&P/ ASX 200 lost 1.2 per cent to 4,946.40 and New Zealand also declined.
WALL STREET: U.S. stocks jumped as the price of oil made another abrupt reversal and rose 4 per cent following a decline the previous day. Chevron and Exxon Mobil made major gains. Strong fourth-quarter results from beleaguered wireless provider Sprint gave telecom stocks a boost. The Dow Jones industrial average jumped 282.01 points, or 1.8 per cent, to 16,167.23. The Standard & Poor’s 500 index rose 26.55 points, or 1.4 per cent, to 1,903.63. The Nasdaq composite index added 49.18 points, or 1.1 per cent, to 4,567.67.
FED PLANS: Investors were watching Wednesday’s Fed statement for signs of the pace of possible future rate hikes. The U.S. central bank raised rates last month for the first time since the 2008 global crisis, citing improved inflation and other data. But uncertainty over the strength of the dollar, low oil prices and China’s outlook have prompted warnings against raising rates too fast.
ANALYST’S QUOTE: Fed officials will probably want to acknowledge the extra uncertainty raised by recent financial and international developments, said Jim O’Sullivan of High Frequency Economics in a report. “But they will likely also want to avoid encouraging the perception that a relatively modest bout of risk aversion in markets or mixed signals from the data will promptly change their outlook in a major way.”
ENERGY: Benchmark U.S. crude shed 33 cents to $31.12 per barrel in electronic trading on the New York Mercantile Exchange. The contract soared $1.11 on Tuesday to close at $31.45. Brent crude, the benchmark for international oils, fell 3 cents to $31.77 per barrel in London. It jumped $1.30 on Tuesday to $31.80.
CURRENCIES: The dollar weakened to 118.10 yen from Tuesday’s 118.31 yen. The euro inched up to $1.0868 from $1.0864.