World stocks rise ahead of Fed statement

World stock markets rise ahead of the conclusion of Federal Reserve policy meeting

Associated Press
Markets sanguine over Cyprus uncertainty
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Protesters shout slogans during a protest outside of the parliament in Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening. Yiannakis Omirou, the speaker of Parliament, said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe. In order to get euro 10 billion ($13 billion) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits — including ordinary citizens' savings — an unprecedented step in Europe's 3 ½-year debt crisis. (AP Photo/Petros Karadjias)

BANGKOK (AP) -- World stock markets moved higher Wednesday as investors set aside their apprehension over the financial fate of Cyprus and looked ahead to the Federal Reserve for its assessment of the U.S. economy.

Britain's FTSE 100 rose 0.4 percent to 6,468.92. Germany's DAX advanced 0.7 percent to 7,999.12. France's CAC-40 added 0.9 percent to 3,809.52. Wall Street appeared set for a session of gains, with Dow Jones industrial futures rising 0.3 percent to 14,428. S&P 500 futures gained 0.3 percent to 1,546.80.

Stock markets in Asia displayed caution after Cypriot lawmakers rejected a proposal Tuesday to place a tax on bank deposits that would have partly funded an emergency bailout to save the Mediterranean country from financial collapse. The proposal, cobbled together by international lenders, would provide the country with 15.8 billion euros ($20.4 billion) to bail out its heavily indebted banks and shore up government finances.

If it doesn't get the money, the banks could fail, Cyprus' government finances could be ruined for years and the country could face expulsion from the union of 17 countries that use the euro. That's a scenario European policymakers fought to avoid with Greece as its bailouts were negotiated because of fears it would splinter the currency union.

"The trouble in Cyprus is going to cause risk aversion," said Daniel Martin of Capital Economics in Singapore. "It's a reminder of how precarious things are in Europe. At some point, we're expecting a nasty shock from Europe, probably in the second half of the year."

Hong Kong's Hang Seng rose 1 percent to 22,256.44. South Korea's Kospi fell 1 percent to 1,959.41. Australia's stock market was dragged lower by mining shares. The S&P/ASX 200 fell 0.4 percent to 4,967.30. Benchmarks in Taiwan, Indonesia and Singapore also fell.

Mainland Chinese shares rose on optimism about the economic outlook as concerns over recent property price curbs faded. The Shanghai Composite Index surged 2.8 percent to 2,317.37, the biggest gain in more than two months, while the smaller Shenzhen Composite Index added 2.7 percent to 949.82. Shares in financial companies, cement producers and home appliances led the gains.

Stock markets in Japan were closed for a public holiday.

Strong housing data from the U.S. softened the damage to confidence from the Cyprus crisis. On Tuesday, government data showed U.S. builders stepping up construction of homes, while a private report showed the number of Americans with equity in their homes increased last year. That suggests one of the biggest drags from the housing crisis is easing.

Investors will also be monitoring the U.S. Federal Reserve, which ends a two-day policy meeting later Wednesday. The Fed is expected to keep borrowing costs at record low levels despite signs of a strengthening economy. The meeting will end with updated economic forecasts and a policy statement, and Chairman Ben Bernanke will hold a news conference.

Fears over Cyprus have also been contained by the European Central Bank's backstop to euro nations. The ECB said after the vote that it would continue to provide emergency liquidity to Cypriot banks to make sure they do not collapse.

Among individual stocks, Chinese property stocks rose sharply. Hong Kong-listed Evergrande Real Estate Group surged 4.9 percent. Shanghai-listed Citic Securities Co., China's biggest securities brokerage by asset value, rose 6.2 percent. Australian mining giants BHP Billiton fell 2.7 percent and Rio Tinto Ltd. shed 2 percent.

Benchmark oil for April delivery was up 33 cents to $92.85 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.58 to finish at $92.16 a barrel on the Nymex on Tuesday.

In currencies, the euro rose to $1.2888 from $1.2875 late Tuesday in New York. The dollar rose to 95.38 yen from 95.09 yen.

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AP researcher Fu Ting contributed from Shanghai.

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