World stocks rise as Fed wraps up 2-day meeting

BANGKOK World stock markets rose modestly Wednesday as investor tensions eased before the Federal Reserve winds up a crucial policy meeting later in the day.

The Fed is widely expected to announce a reduction in its massive bond-buying program, launched after the 2008 financial crisis to boost the flailing U.S. economy.

Stock markets are hoping for a small reduction because the bond-buying has kept interest rates super-low, making it cheaper to borrow money. The low bond yields and flood of money led investors to plow into stock markets, fueling rallies across the globe.

But U.S. central bank officials have increasingly voiced a desire to scale back the program in light of data showing a slow but steady improvement in the U.S. economy. Fed chairman Ben Bernanke put markets on notice in May that "tapering" was likely this year. Bets are for the Fed to announce a $10 billion reduction in monthly bond purchases.

Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong, said he thinks the market will not react with shock if the Fed announces the phasing out of its stimulus program

"I think the market has already digested the news. We got the news in May, so it's already been four months since Ben Bernanke's indication," Lun said.

Paul Dales of Capital Economics said in an email commentary that he also expects the Fed to emphasize that "interest rates will remain low for a long time, perhaps via the publication of its interest rate forecasts for 2016 for the first time."

Britain's FTSE 100 rose 0.2 percent to 6,580.02. Germany's DAX advanced 0.3 percent to 8,618.78. France's CAC-40 gained 0.2 percent to 4,154.99.

Wall Street also appeared headed to a higher open. Dow Jones industrial futures rose 0.1 percent to 15,483. S&P 500 futures gained 0.1 percent to 1,699.90.

In Asia, Japan's Nikkei 225 rose 1.4 percent to close at 14,505.36. Australia's S&P/ASX 200 lost 0.3 percent to 5,238.10. South Korean markets were closed for a public holiday. Benchmarks in mainland China, India, New Zealand and Singapore rose while the Philippines and Indonesia fell.

Hong Kong's Hang Seng, which gained more than 1,000 points so far this September by Tuesday's close, fell 0.3 percent to 23,117.45 as investors booked profits.

Stocks on Wall Street rose on Tuesday as investors bet that the Fed won't cut back its economic stimulus more than expected. The Standard & Poor's 500 index rose for the 10th out of the last 11 trading days. It now stands four points shy of its record high, set on Aug. 2.

Benchmark oil for October delivery was up 95 cents to $106.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.17 to close at $105.42 on the Nymex on Tuesday.

In currencies, the euro fell to $1.3348 from $1.3357 late Tuesday. The dollar fell to 98.84 yen from 99.15 yen.