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Europe shares up, Asia stocks fall on Fed, Ukraine, Omicron

TOKYO (AP) – European stocks opened higher yesterday after a day of steep losses in Asia as markets waited to hear from Federal Reserve chair Jerome Powell after a two-day policy meeting that ends today.

The possibility of conflict between Russia and Ukraine and concern over coronavirus outbreaks also were adding to uncertainties.

France’s CAC 40 edged up 1.1 per cent to 6,861.14 in early trading, while Germany’s DAX added 0.6 per cent to 15,100.95. Britain’s FTSE 100 rose 0.5 per cent to 7,334.99. The future of the Dow Jones Industrial Average was 1.1 per cent lower, while the S&P 500 future fell 1.6 per cent.

On Monday, a late buying spree pushed the benchmark S&P 500 index to a 0.3 per cent gain after pulling it out of so-called correction territory – a drop of 10 per cent or more from its recent high.

The Fed meeting will provide an update on policymakers’ latest thinking on the economy and interest rates. Some economists worry the Fed is moving too slowly in tamping down inflation by raising rates that have been kept low for nearly two years to support markets and economies slammed by the pandemic. Others fret that the Fed may act too aggressively and could risk causing a recession without managing to cool inflation.

Traders at the Korea Composite Stock Price Index (KOSPI). PHOTO: AP

Meanwhile, tensions have soared between Russia and the West over fears that Moscow is planning to invade Ukraine, with NATO outlining potential troop and ship deployments.

The Pentagon ordered 8,500 troops on higher alert to potentially deploy to Europe as part of a NATO “response force” to a military move on Ukraine. President Joe Biden has consulted with key European leaders, underscoring United States (US) solidarity with allies there.

Asian shares declined as Japan made official a government plan to expand areas where pandemic restrictions are being advised to help curb the spread of COVID-19.

Japan’s benchmark Nikkei 225 slipped 1.7 per cent to finish at 27,131.34. Australia’s S&P/ASX 200 dropped 2.5 per cent to 6,961.60. South Korea’s Kospi lost 2.6 per cent to 2,720.39.

Hong Kong’s Hang Seng shed 1.7 per cent to 24,243.61, while the Shanghai Composite dipped 2.6 per cent to 3,433.06.

In energy trading, benchmark US crude added 48 cents to USD83.79 a barrel in electronic trading on the New York Mercantile Exchange. It tumbled USD1.83 to USD85.31 on Monday.

Brent crude, the basis for pricing international oil, rose 59 cents to USD86.86 a barrel.