Global stocks inch up as markets await Fed decision

World stocks edged up and the dollar was little changed on Wednesday investors await the outcome of the Federal Reserve’s policy meeting later in the day. Oil rose towards recent seven- year highs on continued tension between Russia and Ukraine.

The Fed is due to update its policy plan at 7pm GMT after a two- day meeting. A first rate increase is forecast in March and markets are already pricing in three more 25 basis- point increases by year- end.

The MSCI world index rose 0.32%. US equities were more upbeat, however, with S& P futures up 1.01% after the index lost 1.22% in the previous session.

European shares climbed 1.47% and Britain’s FTSE 100 gained 1.38%.

US stocks posted their worst five- day run since 2020 last week, and the MSCI index is on course for its biggest monthly drop since the Covid- 19 pandemic hit markets in March 2020, though analysts at Goldman Sachs said equities had not reached “danger zone” levels.

Sebastien Galy, senior macroeconomic strategist at Nordea Asset Management, said that given the recent volatility he expected the Fed would be “far more cautious about the timing and pace of the balance sheet reduction and that will be welcomed by the equity market”.

Growing tension as Russian troops massed on Ukraine’s border have added to a risk- averse environment for investors.

US President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invaded Ukraine, as Western leaders stepped up military preparations and made plans to shield Europe from a possible energy supply shock.