Stocks are likely to stage a rally Wednesday in line with global peers after the US Federal Reserve held key interest rates steady as expected, and signaled less likely chances of rate hikes in the near term. A tumble in global crude oil prices will add to the positive sentiment.
Holding the main interest rate at 2 per cent, the Federal Open Market Committee said inflation has been "high" but insisted that price rises will eventually moderate. Though it expressed concerns about economic growth and inflation, it indicated it is in no rush to push borrowing costs higher.
Crude prices dropped further below $120 a barrel after Tropical Storm Edouard hit the Texas coast without causing any major disruption to US energy operations. US crude settled down $2.24 to $119.17 while London Brent crude lost $2.98 to settle at $117.70.
Tracking Wall Street cues, Asian shares rallied on Wednesday, ending a three-session losing streak, led by exporters on expectations the US Federal Reserve will not lift interest rates anytime soon. The Nikkei climbed 2.22 per cent, the broader Topix was up 1.78 percent and Straits Times added 0.9 per cent. Hong Kong markets will remain closed all of Wednesday morning after a storm warning.
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