Europe: Stocks open flat before Fed announcement

[LONDON] European stock markets opened flat on Wednesday as global traders awaited the outcome of the US Federal Reserve's policy meeting later in the day for any comment on inflation concerns.

Markets in Asia were similarly little changed.

London's benchmark FTSE 100 index dipped 0.1 per cent to 6,797.20 points.

In the eurozone, Frankfurt's DAX 30 gained 0.1 per cent to 14,569.05 points and the Paris CAC 40 lost 0.1 per cent to 6,051.59.

The US central bank wraps up a two-day policy meeting Wednesday and Fed chair Jerome Powell may use the post-meeting news conference to allay market worries about a possible surge in prices as the economy recovers.

"Investors are treading water ahead of a delicately poised Federal Reserve announcement," noted Richard Hunter, head of markets at Interactive Investor.

"Its previous assertion that the current inflation effect is transitory will need to be reiterated in order to avoid further uncertainty in the bond markets while for equities, any hint of a rise in interest rates earlier than expected would be unsettling."

US benchmark 10-year Treasury yields - a guide to future interest rates - have risen to a one-year high in recent weeks, with anxiety about higher inflation further stirred by Washington's US$1.9 trillion stimulus package.

AFP