NEW YORK (Reuters) – Asian stocks appeared to rally on Wednesday, rebounding from a steep sell-off on Tuesday, while Australian stocks opened weaker to catch up after a Tuesday holiday.
Higher markets in Europe and a slight overnight fall from record stocks in the United States suggested investors were cautious about potential impediments to a US stimulus plan and pending a policy statement from the Federal Reserve.
Eyes are on the Australian inflation data coming out later Wednesday, said Steven Daghlian, a market analyst at CommSec in Sydney, who noted that both stocks and the Aussie dollar are “in a tear”. Aussie stocks hit an 11-month high on Monday, “close to pre-COVID levels,” he said.
The US Federal Reserve will announce its two-day policy meeting on Wednesday. Analysts expect the Fed to maintain its moderate tone to accelerate the economic recovery.
The US stimulus talks take center stage, with US Senate leader Chuck Schumer saying Democrats will move forward with President Joe Biden’s coronavirus plan if necessary without Republican backing.
European stocks rallied Tuesday as strong gains from asset manager UBS and auto parts maker Autoliv contributed to a string of optimistic business updates, while the International Monetary Fund raised its forecast for global growth in 2021.
US Treasury yields had largely fallen overnight in choppy trading, having previously hit the three-week low at the long end of the curve, as investors remained cautious about the size of a proposed US stimulus package .
Benchmark 10-year bonds returned 1.033%, up from 1.04% late Tuesday.
The Australian S & P / ASX 200 futures lost 0.25% in early trading.
Japan’s Nikkei 225 futures added 0.07%, while the Nikkei 225 index closed the overnight session%. Hong Kong’s Hang Seng index futures rose 0.68%.
E-mini futures for the S&P 500 were up 0.21%.
The Australian dollar gained 0.05% against the dollar at $ 0.775.
The US dollar fell across the board as traders showed a preference for riskier currencies. The dollar index fell 0.194%, while the euro rose 0.02% to $ 1.2162.
The Japanese yen weakened 0.01% against the dollar at 103.61 per dollar, while the pound last traded at $ 1.3735, up 0.01% one day.
Reporting by Alwyn Scott; Editing by Lisa Shumaker