LONDON - European stocks rose Wednesday and Wall Street was expected to open higher ahead of testimony from the Federal Reserve chief that could either ease market turmoil or add to it. Asian markets mostly fell in a spillover sell-off from the previous day's losses.
France's CAC 40 rose 2.2 percent to 4,084.81 and Germany's DAX added 2.4 percent to 9,090.93. Britain's FTSE 100 gained 1 percent to 5,690.38. Wall Street was set to rise after a losing streak. Dow futures were up 0.8 percent and S&P 500 futures advanced 1 percent.
Federal Reserve Chair Janet Yellen begins a two-day congressional testimony Wednesday that is keenly awaited by investors. Since the Fed decided to raise its key interest rate from a record low in December, the U.S. economy has hit some turbulence and markets have become hugely volatile. Lawmakers will likely have a lot of questions for Yellen about the future pace of rate hikes and the Fed's role in supporting the U.S. economy.
"Traders and investors want clarity on the macro-economic environment and, to a degree, we hope this can come from key corporate feedback and the top-dog central bankers," said Chris Weston, chief market strategist at IG in Melbourne, Australia. "Janet Yellen takes the stage in today's U.S. session to testify to the House Financial Services Committee and, while her comments will be pre-prepared, the market wants to make sense of how she sees the world," he said in a commentary.
Investors are questioning whether European banks such as Deutsche Bank have sufficient capital after a slump in its share price and a record annual loss. Despite assurances from the German bank, some analysts expect it will need to issue new shares to raise billions of dollars, which is likely to further depress its share price. Banks are also hurt by the prospect of interest rates remaining low, which tends to weaken their earnings. After sharp drops this week, shares in banks were picking up Wednesday, with Deutsche Bank up 11 percent.
Japan's Nikkei 225 sank 2.3 percent to 15,713.39 and is down about 11 percent in the past month. Australia's S&P/ASX 200 shed 1.2 percent to 4,775.70. Stock benchmarks also fell in Singapore, Indonesia, New Zealand and India but rose in Thailand and the Philippines. Markets are closed in China, Taiwan, Hong Kong and South Korea for Lunar New Year holidays. Hong Kong and Korea reopen on Thursday and China and Taiwan resume trading on Monday.
Brent crude, a benchmark for international oils, was up 54 cents at $30.86 a barrel in London. It fell $2.56 the day before. It was about $60 a barrel a year ago and $109 two years ago. Benchmark U.S. crude was up 52 cents at $28.46 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75 on Tuesday.
The euro fell to $1.1257 from $1.1289 the day before. The dollar edge up to 114.99 yen from 114.95 yen.