Market mood steadies after Alcoa earnings

LONDON - A solid start to the U.S. quarterly corporate reporting season helped shore up the mood across financial markets on Wednesday, ahead of the minutes to the last policy meeting of the U.S. Federal Reserve.

One market that bucked the trend, however, was Tokyo's Nikkei 225 stock average, which closed down 2.1 percent at 14,299.69. The dollar was trading at about 102 yen, a drop from about 104 yen a month earlier that, if sustained, could hurt sales and earnings at export-reliant companies. The latest bout of yen strength came after the Bank of Japan failed to announce fresh stimulus measures earlier this week.

Elsewhere, investors appeared to be brushing themselves down following a Nasdaq-inspired bout of uncertainty. Gains in the U.S. on Tuesday helped contribute to the steadier tone in markets on Wednesday, though investors remained cautious.

"At the moment traders remain wary that the rebound on Tuesday will remain little more than a dead cat bounce," said Joao Monteiro, an analyst at Valutrades.

In Europe, the FTSE 100 index of leading British shares was up 0.7 percent at 6,639 while Germany's DAX rose 0.4 percent to 9,527. The CAC-40 in France was 0.5 percent higher at 4,446.

Wall Street was poised for further solid gains following Tuesday's snapback - Dow futures up 0.2 percent at 16,206 and the broader S&P 500 futures 0.1 percent higher at 1,846. Perhaps more importantly, Nasdaq futures were up 0.2 percent.

The tech-heavy Nasdaq was largely responsible for the early-week nervousness across financial markets as investors grew jittery about whether technology, Internet and biotech stocks were overvalued.

Upbeat earnings from aluminum company Alcoa in an after-hours statement on Tuesday has helped solidify the mood. Alcoa was poised for a 3 percent advance at the bell.

"Even more optimistically, the management's accompanying statement highlighted its improved view of conditions for the rest of the year," said Alastair McCaig, a market analyst at IG.

Investors will also be focusing later on the minutes to the last Fed policy meeting to gauge the mood among policymakers over the current pace of the withdrawal of the monetary stimulus.

Earlier in Asia, Hong Kong's Hang Seng rose 1.1 percent to 22,843.17 and South Korea's Kospi added 0.3 percent to 1,998.95. Australia's S&P/ASX 200 jumped 1.0 percent to 5,463.78. Markets in Southeast Asia also rose.