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World stocks rise on hopes Fed to keep stimulus

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DAVID McHUGH and TERESA CEROJANO | October 30, 2013 01:40 PM EST | AP

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FRANKFURT, Germany (AP) — Stocks in Europe and the U.S. gave up early gains Wednesday as investors waited for more news about how long the Federal Reserve will keep its economic stimulus fully in place.

Shares in Europe closed flat after earlier gains. Britain's FTSE ended up a scant 0.04 percent at 6777.70. Germany's DAX was off 0.1 percent at 9010.27 and France's CAC 40 slipped 0.1 percent to 4274.11.

Investors had earlier bid shares higher ahead of the end of a two-day meeting of Fed officials at which the U.S. central bank is expected to maintain its monthly bond purchases of $85 billion. The purchases are aimed at stimulating economic growth by keeping borrowing rates low. The Fed is to release its policy statement Wednesday afternoon in the U.S.

The U.S. central bank's cheap money policy has underpinned stock markets worldwide for several years, as near-zero interest returns on bonds and savings push investors into riskier assets such as shares. Weaker U.S. hiring and other economic indicators have built a case that the Fed may delay "tapering" of the bond purchases until next year.

Shares of Volkswagen, Europe's largest automaker by sales volume, rose 5.7 percent after the company beat analyst expectations for earnings and stayed with its profit forecast.

U.S. stocks fluctuated after gains at the start of the day and traded flat ahead of the Fed statement. The Dow was off 0.1 percent at 15,665.40 following Tuesday's record close. The Standard & Poor's 500 fell 0.2 percent to 1,768.30 in early afternoon trading in New York.

Asia's key benchmark, the Nikkei 225 in Tokyo, closed 1.2 percent higher at 14,502.35. Hong Kong's Hang Seng climbed 2 percent to 23,304.02. China's Shanghai Composite finished up 1.5 percent at 2,160.46. Most other indexes in the region also recorded gains. Australia's S&P/ASX 200 shed 0.2 percent to 5,430.90.

Oil fell $1.02 cents to $97.16 in electronic trading on the New York Mercantile Exchange. The euro rose 0.1 percent $1.376, while the dollar was unchanged on the day at 98.18 yen.


Cerojano contributed from Manila, Philippines.