Stocks are expected to fall for a second consecutive day ahead of US Federal Reserve notes due Wednesday, when they could announce their plan to slow down their $85 billion-per-month stimulus bond buying program.
“The key event influencing the markets is tomorrow’s
[Wednesday] Federal Open Market Committee minutes. It will set 90
percent of the dynamic for the market,” Ariel Cherny, an
analyst at Moscow’s Allianz Investment office, told Bloomberg.
A majority of economists believe the Fed will begin to dismantle
the program in September, which would hit emerging stocks hard
especially, as the bond-buying-program has been a push in
emerging markets.
Russia stocks are headed for a second day of drops, as crude oil
trade hit a two-month low on Tuesday.
The MICEX slipped over 1 percent midday, but recovered by market
close, and is trading up 0.13 percent at 1,379.11. Sberbank,
Gazprom, and Lukoil, all heavyweight equities, dropped in the day
session but are expected to open high. The dollar-based RTS will
open 0.40 percent at 1317.77.
WTI saw its biggest decline in two months on Tuesday, and is
trading at $104.81 per barrel, and Brent is down 0.36 percent at
$109.75 a barrel, still high on Egypt unrest.
Futures of the both oil blends dropped after the American
Petroleum Institute reported inventories dropped by 1.2 million
barrels last week.
Asian stocks have dropped in anticipation of a Fed scale-back.
Hong Kong’s Seng Index dropped 1.1 percent, and is trading down
0.96 percent, and China’s Shanghai Composite dipped before
climbing 0.1 percent.
Japan’s Nikkei Index is recovering after an early trading session
dip, and is up 0.17 percent.
European indices are red across the board as investors carefully
inspect the Fed’s next move. Amsterdam’s EURO STOXX dropped 1.25
percent, London’s 100 Index fell 0.19 percent, France’s CAC lost
1.35 percent, and Gemany’s Dax is down 0.79 percent.
US equities are mixed ahead of Fed minutes. The Dow Jones closed
down 0.05 percent, the S&P 500 climbed 0.38 percent, and the
NASDAQ increased 0.68 percent.