Asia cautious about Fed and corporate profits By Reuters

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© Reuters. Man in protective mask walks past screen showing Nikkei index finger outside brokerage house in Tokyo

By Swati Pandey and Chibuike Oguh

SYDNEY / NEW YORK (Reuters) – Asian stocks were cautiously higher on Wednesday as investors stopped before the Federal Reserve’s policy decision as oil prices surged in hopes that demand will resume that many countries will lift some of the restrictions related to coronaviruses.

In early Asian trade, the MSCI (NYSE ? largest Asia-Pacific equity index excluding Japan () added 0.2% for its third consecutive day of gains.

Japanese markets were closed on a public holiday.

Australia () increased 0.2% and South Korea () increased 0.3%. New Zealand equities () fell 0.6%.

“The narrative of the market has remained centered on recent competing themes, the stimulus and reopening measures reported as great downwinds … accompanied by concerns about behavioral changes in the household and business sectors weighing on growth”, said Matthew Sherwood, chief investment officer at Perpetual.

“We remain concerned as the liquidity of the Fed can offset the systemic risks in the credit markets. “

The markets were awaiting guidance from the US Federal Reserve, which is expected to issue a policy statement at the close of its two-day meeting on Wednesday. The European Central Bank meets on Thursday.

Analysts said the Fed was unlikely to take any significant new policy action, given the scale and depth of its efforts to counter the economic damage caused by the coronavirus.

On Wall Street overnight, investors abandoned the tech giants despite Google’s earnings boom (O ? of Alphabet Inc., dragging the top three US stock indices into the red).

The Dow Jones Industrial Average () fell 0.3%, the S&P 500 () lost 0.5% and the tech-rich Nasdaq Composite () lost 1.4%.

Investors will then read the profits of the other big tech companies – Facebook (O :), Amazon (O ? and Apple (O :).

“There has been a great sector rotation as the money has moved out of high value and growth sectors in technologies like Amazon and has gone to value and cyclical sectors like energy, industry and finance Said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

UBS’s reassuring results lifted European banks by almost 5%, while Wall Street digested optimistic figures from the industrial conglomerate 3M Co (N :), manufacturer of N95 respirators and manufacturer of drugs Pfizer Inc (N :).

In foreign currencies, the dollar weakened against the Japanese yen at 106.60, worried that the coronavirus would spread further than expected if companies reopened prematurely.

The euro () rose 0.2% to $ 1.0840, although the euro () index eased after Fitch downgraded Italy’s credit rating to BBB-, just a notch above the status of “junk”.

The () against a basket of currencies fell 0.1%.

In commodities, US crude () jumped 9% to $ 13.44 a barrel, and Brent () rose 1% to $ 20.65.

US crude was trading above $ 50 a barrel in February alone.

Gold was slightly lower at $ 1,706.32 an ounce.

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