PARIS - Global stocks rose Wednesday, as investors appeared increasingly confident that the U.S. Federal Reserve won't announce a reduction in its economic stimulus later.
The Fed's $85 billion of monthly bond
purchases have kept U.S. interest rates low to encourage economic recovery, but
also sent a flood of money into stock markets worldwide in search of higher
But on Wednesday, a day after most
markets were down, investors seemed to find new confidence that the Fed will maintain
its current level of purchases.
"Tapering is likely the only
thing on most investors mind today," said Alex Conroy, financial sales
trader at Spreadex.
Conroy added that Wednesday's higher
stock prices "would suggest investors are again attempting to position
themselves for no taper. If the last few months are anything to go by, expect
huge volatility today as investors attempt to get ahead of the Fed."
In Europe, investors were also
encouraged by signs the Germany economy is picking up steam. The Ifo
institute's closely watched business confidence index climbed to 109.5 points
this month from 109.3 in November -- a signal managers anticipate faster
economic growth in the new year.
In morning trading, France's CAC-40
was up 0.6 percent to 4,093, while Germany's DAX rose 0.9 percent to 9,168. The
FTSE index of British shares climbed 0.4 percent to 6,511.
Wall Street seemed poised to open
higher. Dow futures were up 0.3 percent to 15,864 while the broader S&P
futures rose 0.4 percent to 1,779.
The dollar's near term fortunes will
likely rest on what the Fed does. It was trading fairly flat in the run-up to
the decision, with the euro down 0.1 percent at $1.3752.
Earlier in Asia, stocks mostly rose.
Japan's Nikkei 225 closed 2 percent higher at 15,587.80, while Hong Kong's Hang
Seng index climbed 0.3 percent to 23,243.82.
China's Shanghai Composite index edged
down 0.1 percent to 2,148.29 and South Korea's Kospi finished 0.5 percent
higher, at 1,974.63.