MSCI’s regional equity benchmark edged up 0.1%. The Nikkei 225 added a marginal 0.038%, while the Kospi gained 0.21%. Hong Kong led the region, with the Hang Seng rising 0.65% and futures pointing to a further 0.3% gain.
In India, the GIFT Nifty indicated a muted start for markets in red. The Nifty index had closed in Tuesday’s trade around the 23,100 mark which was near lows previously seen on June 10 this year.
The Japanese yen traded little changed at 155.24 per dollar, and the offshore yuan was similarly flat at 6.7131 per dollar.
Also Read: The Fed has to walk a fine line Wednesday. How the stock market may react, according to JPMorgan
US futures also inched higher in early dealing, lifted by news that OpenAI was considering a fresh funding round valuing the company at $1.2 trillion. Wall Street had a mixed session on Tuesday, as the S&P 500 and Nasdaq 100 both retreated even as chip stocks managed modest gains.
The Fed’s policy announcement, due Wednesday, followed higher than expected core inflation data last week and mounting worries over government budgets. Both factors strengthened bets on the central bank’s first-rate increase since 2023, with markets pricing in over a 90% probability of a hike according to a Bloomberg report.
Officials had kept the benchmark rate steady at 3.5%-3.75% since December, arguing that temporary factors were delaying progress on inflation.
The possibility of a tighter policy, combined with high energy costs and borrowing rates, weighed on investor sentiment. The Bank of England and Bank of Japan were also due to announce decisions this week, adding to the potential for a broader shift in the global monetary outlook.
The rate-hike expectations had already driven a bond-market selloff, with the 10-year Treasury yield touching 5.04% which was its highest level in nearly two decades, before settling at 5%.
Also Read: Dow Jones falls another 300 points ahead of Fed decision as oil, yields remain higher
Meanwhile in oil, Brent rose nearly 3% to around $109 a barrel in Tuesday’s trade before settling around the $108 per barrel mark. West Texas Intermediate rose over 4%.
Supply concerns persisted after drone strikes shut Saudi Arabia’s East-West pipeline and outages hit Libyan oil fields, compounding disruptions already caused by the Iran conflict.
