World stock markets stabilize as focus turns to Fed

A currency trader watches computer monitors near the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Dec. 18, 2018. Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve. (AP Photo/Lee Jin-man)
A currency trader walks by the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Dec. 18, 2018. Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve. (AP Photo/Lee Jin-man)
A currency trader talks on the phone near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Dec. 18, 2018. Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve. (AP Photo/Lee Jin-man)
A currency trader talks near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Tuesday, Dec. 18, 2018. Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve.(AP Photo/Lee Jin-man)

SINGAPORE — World stocks stabilized Tuesday, with Wall Street expected to edge up after heavy losses the day before, as traders prepare for a likely interest rate hike by the Federal Reserve.

KEEPING SCORE: In Europe, Germany's DAX was 0.5 percent higher at 10,820 after falling into a bear market on Monday. France's CAC 40 was flat at 4,801 and Britain's FTSE 100 index fell 0.5 percent to 6,740.

WALL STREET: On Monday, broad selling knocked U.S. indexes to their lowest levels in over a year. Investors sold almost everything, from technology and retail stocks to steadier high-dividend companies. Less than 40 of the 500 stocks in the broad S&P 500 index finished the day higher. Stocks were set to recover slightly on Tuesday. S&P 500 and Dow futures both rose 0.3 percent.

FED MEETING: The Federal Open Market Committee begins a two-day meeting on Tuesday. It is expected to raise its short-term interest rate by a modest quarter-point, to a range of 2.25 percent to 2.5 percent a day later. The rate is used as a benchmark for many consumer and business loans. Investors fear more monetary tightening would weigh on U.S. growth, and eventually, the global economy, which is already expected to slow in 2019 because of trade tensions. President Donald Trump tweeted that it was "incredible" the Fed was considering another rate hike, with "a very strong dollar and virtually no inflation." The central bank forecasts three more rate hikes in 2019.

ANALYST'S TAKE: "Despite Donald Trump's recent overture, the Fed looks set to hike rates again on Wednesday with market players anxious to see if the economy can handle more policy tightening given expectations for slowing growth," ING economists Nicholas Mapa and Prakash Sakpal said in a commentary.

GERMANY GLOOM: Business confidence took a hit in Europe's largest economy. The Ifo Institute said Tuesday its business confidence index dropped to 101.0 points for December from 102.0 points in November as managers' view of both their current circumstances and their prospects for the next six months fell. That comes as the German DAX stock index entered a bear market this week, down over 20 percent from a January high.

ASIA'S DAY: Japan's Nikkei 225 index was 1.8 percent lower at 21,115.45 and the Kospi in South Korea dropped 0.4 percent to 2,062.11. Hong Kong's Hang Seng slid 1.1 percent to 25,814.25. The Shanghai Composite index dipped 0.8 percent to 2,576.65. Australia's S&P ASX 200 was down 1.2 percent at 5,589.50. Shares were lower in Taiwan and Southeast Asia.

ENERGY: Oil prices tumbled on worries about oversupply and softening growth in China, which could hit demand. Benchmark U.S. crude shed $1.34 to $48.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.32 on Monday. Brent crude, used to price international oils, gave up $1.37 to $58.24 a barrel. It lost 67 cents the day before.

CURRENCIES: The dollar weakened to 112.27 yen from 112.83 yen in late trading Monday. The euro rose to $1.1395 from $1.1349.

Indonesia president urges military to stay out of...

Oct 5, 2017

Indonesia's president has urged the military to stay out of politics and remain loyal to the...

Hundreds leave Papua villages in separatist...

Nov 20, 2017

Indonesian police say hundreds more people have left villages in easternmost Papua that were at the...

Volcano gushing ash over Bali closes airport for...

Nov 28, 2017

A volcano gushing towering columns of ash closed the airport on the Indonesian tourist island of...

Bali volcano ash drifts 4.7 miles high, airport...

Nov 29, 2017

An erupting volcano with a deadly history on Indonesia's Bali island has spread drifting ash 7,600...

Greenpeace calls for investigation into Sinarmas...

Dec 20, 2017

Greenpeace has called for an investigation into the relationship between paper giant Sinarmas and...

Penggerak pasaran mengikut TradingView

About Us

Duniaga is Malaysia’s top local source for business news and information where people head to stay connected with the business news. We give daily in-depth analysis on the business happenings in the country.

Contact us: sales[at]duniaga.com

Subscribe Now!