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Global stocks waver ahead of the Fed decision on interest rates

Asian stocks

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Global stocks waver ahead of the Fed decision on interest rates. European equities are mixed after deeper losses in Asia, ahead of a Federal Reserve policy decision later Wednesday when the central bank is expected to cut interest rates. The futures of Wall Street indexes are slightly higher on Wednesday.

The focus of investors is the renewed trade talks between Washington and Beijing.

On Tuesday, US President Donald Trump almost completely killed hopes of an early agreement after he tweeted that China is no longer buying US agricultural goods as promised, and is likely trying to delay negotiations.

“China is doing very badly, the worst year in 27 – was supposed to start buying our agricultural product now – no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years”, wrote Donald Trump on Twitter.

Earlier today, local media announced that China and the US had completed the new round of trade talks in Shanghai without any evidence of progress towards ending their longstanding dispute.

Asian markets recap

The main stock indexes in the Asia-Pacific ended today’s trading session into the red amid weak economic data from China and a decline in investor optimism over lack of progress since the end of the first phase of US-China trade talks.

In China, the mainland index Shanghai Composite fell by 0.67% to 2,932.51 points. Hong Kong’s benchmark Hang Seng wiped out 368.75 points, or 1.31%, to 27,777.75 points. The shares of AIA again fell by over 2%. Shares in Hong Kong-listed China Vanke reported a decline of 2.15% in value, while rival Sunac China Holding saw a decline in its holdings of 3.63%. Manufacturing activity in China shrinks for the third consecutive month in July, according to an official study, highlighting the negative impact of the trade war with the United States on the economy. The PMI rose to 49.7 points in July, while in June it reached 49.4 points, according to the National Bureau of Statistics of China. However, the figure remains below the 50 point mark, which distinguishes growth from contraction.

In Japan, the blue-chip index on Tokyo Stock Exchange, Nikkei 225, declined by 187.78 points, or 0.86%, to 21,521.53 points. The stocks of Sony Corporation rose by 5.31% after the company presented a positive first-quarter report, with earnings rising to a record high. The best performers of the session on the Nikkei 225 were Daiichi Sankyo Co (+6.45%), Nippon Express Co (+6.02%) and NGK Insulators (+5.77%), while on the flipside were Chiyoda Corp (-16.24%), Konica Minolta (-11.39%) and Asahi Glass Co (-7.28%).

Nikkei 225

The South Korean index Kospi is down by 0.69% to 2,024.55 points.

The Australian benchmark S&P ASX 200 fell by 0.47% to 6,812.60 points. The consumer prices in the country are rising faster than expected in the second quarter, with the leading index gaining 0.6%. This is above the 0.5% rise expected by economists.

European markets mid-session recap

European stocks traded around the flatline on Wednesday morning as investors await an interest rate decision from the US Federal Reserve. The pan-European Stoxx 600 declined by 0.14% to 384.64 points in mid-session trading. Utilities and household goods fell 0.7% while construction and material stocks jumped out to 1.1% gains.

German index DAX 30 inched higher by 20.57 points, or 0.17%, to 12,167.81 points at 10:15 GMT. Yesterday, the index recorded its worst daily performance in 6 months, wiping out 2.1% of its value. The carmakers are performing mixed today with Volkswagen gaining 0.14% and Daimler declining by 0.55%. The chemical giant BASF is up by 0.3%, while the pharmaceutical company Bayer added 1.3%.

French index CAC 40 is trading with an increase of 0.02% to 5,511.85 points. The stocks of BNP Paribas gained 3.4% after the bank posted a net profit for the quarter of 2.47 billion EUR (2.76 billion USD), also beating expectations on the back of strong growth in its corporate and investment banking unit. Air France KLM shares are traded 7.3% higher after its second-quarter earnings and the announcement that members of its pilots’ union had voted in favor of the development of a new low-cost airline, Transavia France.

CAC 40

British index FTSE 100 is down by 45.78 points, or 0.60%, to 7,600.99 points. Wealth manager St. James’s Place fell by 5.3%, on course for its worst day since June 2016, after it missed forecasts for operating profit, as weaker client sentiment weighed on inflows of new money in the first half of the year and costs rose. Shares of Lloyds Banking Group, Britain’s biggest mortgage lender, slipped by 5% and were tracking their worst day in more than three years after a further charge to meet claims for mis-sold insurance to consumers hit the company’s earnings. Housebuilders, which have been under pressure due to heightened worries of a no-deal Brexit under new Prime Minister Boris Johnson, skidded after Taylor Wimpey forecast a fall in annual margins and the company’s shares were down 3.7%.

Wall Street pre-session recap

Wall Street stock index futures were higher Wednesday morning, as market participants braced for the outcome of the Federal Reserve’s meeting later in the session.

At around 06:30 a.m. ET, Dow futures rose 61 points, indicating a positive open of more than 58 points. Futures on the S&P and Nasdaq were both slightly higher.

ADP payrolls for July will be released at around 08:15 a.m. ET. Employment cost index figures for the second quarter and the Chicago Purchasing Manager Index (PMI) data for July will follow slightly later in the session.