World stocks mixed as investors take wait-and-see approach to US Fed meeting

HONG KONG – World stock markets were mixed Tuesday as investors remained cautious ahead of a U.S. Federal Reserve meeting that’s expected to update forecasts for the world’s No. 1 economy.

The economic growth outlook for the U.S. became cloudier after the International Monetary Fund lowered its forecast for 2014 growth to a modest 2 per cent from 2.7 per cent previously. The Fed’s Open Market Committee is expected to follow suit and adjust its projections following the meeting, which concludes on Wednesday, after recent data showed that economy shrank in the first quarter because of a severe winter, while the unemployment rate has improved and inflation has picked up.

“These developments should lead to substantial revisions of the economic projections of FOMC participants,” Rabobank strategists said in a report.

In early European trading, Germany’s DAX rose 0.8 per cent to 9,966.71 while France’s CAC 40 climbed 0.5 per cent to 4,533.99. The FTSE 100 index of leading British companies advanced 0.3 per cent to 6,772.01.

U.S. stocks were poised to open higher. Dow futures gained 0.3 per cent to 16,756.00 while broader S&P 500 futures rose 0.3 per cent to 1,934.70.

Asian markets were more restrained. Investors in the region were taking a “wait-and-see mode,” Credit Agricole CIB strategists said.

Japan’s benchmark Nikkei 225 rose 0.3 per cent to close at 14,975.97, rebounding from a sharp 1.1 per cent drop the day before as the dollar strengthened 0.2 per cent to 102.02 Japanese yen.

South Korea’s Kospi added 0.4 per cent to end at 2,001.55 while Hong Kong’s Hang Seng shed 0.4 per cent to 23,203.59. In mainland China, the Shanghai Composite Index lost 0.8 per cent to 2,066.70. Australia’s S&P/ASX 200 slipped 0.2 per cent to 5,400.70.

In energy trading, benchmark crude oil for July delivery fell 59 cents to $106.31 in electronic trading on the New York Mercantile Exchange. The contract fell 1 cent to $106.90 on Monday.

The euro edged higher to $1.3573 from $1.3572 in late trading Monday.