Global Markets Build On Gains

By Josie Cox 

        Global stock markets were steady Wednesday following a slight rebound in Chinese equities, but trading volumes were expected to remain thin and investors cautious ahead of a policy statement from the U.S. Federal Reserve.
        The Stoxx Europe 600 was 0.3% higher early in the session, building on Tuesday's 1.1% gain. In the U.S., futures contracts showed the S&P 500 opening flat having also rallied on Tuesday. Futures, however, don't always accurately predict moves after the opening bell.
        China's shares oscillated between gains and losses Wednesday before closing higher as officials stepped up efforts to calm markets on the back of three days of selling that knocked 11% off the value of China's main stock index.
        "Sentiment toward China remains highly volatile," said Ian Williams, an economist and strategist at brokerage Peel Hunt in London. He added, however, that investors broadly appear calmer early Wednesday than they might have a day ago.
        Gains in Europe were also spurred by some stronger-than-expected corporate earnings.
        Shares in British food ingredients company Tate & Lyle PLC surged close to 8% after the group reiterated its full-year guidance and reported earnings in line with expectations.
        Shares in British American Tobacco PLC and Barclays PLC also rallied on solid results. The British bank also announced it was scrapping its dividend target to retain capital.
        Later in the session, investors' attention will focus on the U.S. Fed's policy statement.
        Chairwoman Janet Yellen isn't scheduled to host a news conference and the Fed won't publish any fresh economic projections, but officials could provide hints on the economy's trajectory.
        Paul Donovan, an economist at UBS, said there is no expectation for a change in policy Wednesday but market participants will be waiting to see whether the Fed signals an intention to raise interest rates as early as September.
        "What we are likely to get is a Fed that emphasizes data dependency, and this therefore perhaps makes the forthcoming data more important than the Fed decision today," he wrote in a note to clients.
        A first reading for second-quarter U.S. gross domestic product, the broadest sum of goods and services produced across the economy, is due Thursday.
        The euro was little changed against the dollar midmorning at $1.1061. The dollar was also broadly flat against Japan's yen at Yen123.64.
        In commodity markets, Brent crude was 0.8% lower at $52.88 a barrel having hit its lowest level since January on Tuesday amid concerns about the persistent global oil glut. Gold was slightly less than 0.1% higher at $1,096.70 per troy ounce.
        Write to Josie Cox at josie.cox@wsj.com
        (END) Dow Jones Newswires

        July 29, 2015 05:17 ET (09:17 GMT)

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