Asia: STI up 0.96% while rest of markets subdued

[SINGAPORE] Asian stocks were subdued on Wednesday as a wait-and-see mood prevailed ahead of the Federal Reserve's policy statement due later, and with sentiment fragile after a rout in Chinese shares the previous day.

MSCI's broadest index of Asia-Pacific shares outside Japan stood effectively unchanged after shedding 1.2 per cent on Tuesday.

The Straits Times Index was up 0.76 per cent to 2,564.65 points, the likely result of investors hunting for bargains. Banks and SingTel rose to lift the benchmark index in early trading.

SingTel was up 6 Singapore cents to S$3.46 while DBS gained 3 Singapore cents to S$13.79.

Australian shares were down 0.3 per cent. Asia failed to draw much support from an overnight bounce on Wall Street, where upbeat earnings results and a bounce in crude oil pushed up the Dow 1.8 per cent and the S&P 500 1.4 per cent, with Tuesday's six percent tumble in Chinese shares keeping investors wary.

Risk appetite was also subdued as crude oil prices resumed falling and ahead of the closely-watched Fed policy meeting outcome later in the day. "The Fed's assessment of international developments and the implications for the US. economy and financial markets should be focus for discussion," wrote Sean Callow, senior currency strategist at Westpac in Sydney.

"With only a short statement, we expect the Fed to repeat that normalization will proceed as data allows in 2016, though markets will be watching for any shift to a more dovish stance." Prospects of the two-day Fed meeting concluding with a dovish statement nudged US Treasury yields down.

The benchmark 10-year Treasury note yield dipped about 2 basis points overnight. US crude surged 3.7 per cent on Tuesday after OPEC renewed calls for rival producers to cut supply alongside its members.

But the bounce proved fleeting for the volatile commodity, which has sunk to 13-year lows this month with a China-led global economic slowdown expected to curb demand. US crude was last down 2.5 per cent at US$30.65 a barrel.

In currencies, the dollar held to gains made against the safe-haven yen following the ebb in risk aversion during the US trading session.

The greenback stood little changed at 118.36 yen after bouncing overnight from 117.65.

The euro was nearly flat at US$1.0867. The Australian dollar dipped 0.1 per cent to US$0.6995. The Aussie rose 0.7 per cent overnight along with the bounce in crude prices.

REUTERS