HONG KONG - World stock markets charged higher Wednesday, led by a near 5 percent surge in China, as investor optimism mounted ahead of a highly anticipated Federal Reserve decision on whether to raise interest rates for the first time in nearly a decade.
European shares rose in early trading. France's CAC 40 rose 1.2 percent to 4,622.72 and Germany's DAX climbed 0.8 percent to 10,272.18. Britain's FTSE 100 gained 0.7 percent to 6,179.24.
U.S. stocks were poised for a muted open, with both Dow and broader S&P futures little changed.
Investors around the world are guessing whether or not the Fed will raise interest rates for the first time in close to a decade at a two-day policy meeting that begins Wednesday. Fed Funds futures imply just a 28 percent chance of a rate increase this week. But some economists say it's time to start gradually raising interest rates given that the U.S. job market has more or less recovered. Others argue rates should remain on hold amid global stock market turmoil and China's slowdown, among other factors. The Fed's decision is expected Thursday though Asian equity markets won't be able to react until a day after.
"Every other country including China is waiting for the Fed before they roll out new policies," said Jackson Wong of United Simsen Securities. He said Asian markets took their lead from Tuesday's gains in the U.S., where investors seemed to be leaning toward the view that rates will remain on hold for at least another month. However, if Fed officials raise interest rates this week, "that would mean a stronger U.S. dollar and more money might drain from emerging markets," Wong said.
China's Shanghai Composite Index jumped 4.9 percent to close at 3,152.66, with all of the gains coming in the final hour of trading, a pattern that has led analysts to believe the government is intervening to support share prices. Japan's Nikkei 225 rose 0.8 percent to close at 18,171.60 and South Korea's Kospi added 2 percent to 1,975.45. Hong Kong's Hang Seng gained 2.4 percent to 21,966.66. Australia's S&P/ASX 200 climbed 1.6 percent to 5,098.80.
U.S. benchmark crude rose 78 cents to $45.37 in electronic trading on the New York Mercantile Exchange. The contract rose 59 cents to $44.59 a barrel in New York on Thursday. Brent crude, a benchmark for many international types of oil imported into the U.S., added 61 cents to $49.19 a barrel.
The dollar slipped to 120.35 yen from 120.43 yen on Tuesday. The euro dropped to $1.1248 from $1.1309.