Asian stocks drop, European stocks steady

Gulf Today Report 

Asian stock markets dropped on Tuesday as investors await the outcome of this week’s Federal Reserve meeting. 

Shanghai, Tokyo, Hong Kong and South Korea declined. 

The Shanghai Composite Index sank 0.5% to 3,422.52 and the Hang Seng in Hong Kong retreated 0.2% to 28,910.50.

The Nikkei 225 in Tokyo lost 0.1% to 29,089.80 after the Bank of Japan, as expected, left interest rates and other policy settings unchanged. The central bank forecast inflation will be below its 2% target through 2023, indicating policy will stay loose.

The Kospi in Seoul declined 0.4% to 3,204.27 after the government reported economic output rebounded to above pre-pandemic levels after growth accelerated to 1.6% over the previous quarter in the three months ending in March.

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Investors are hopeful that the Fed would keep its lending rate close to zero and would pump in more money into the financial system.

The Fed's announcement Wednesday "should be boring, as policymakers are widely expected to keep policy steady,” said Edward Moya of Oanda in a report. 

Investor confidence has increased as governments roll out coronavirus vaccines they hope will allow business activity to return to normal. That has been tempered by unease about possible higher inflation and interest rates.

European stocks

European stocks steadied on Tuesday following blue-chip companies recording gains. 

The pan-European STOXX 600 index slipped 0.01% by 07:07 GMT, with gains in oil & gas stocks offsetting losses in financial services firms.

Asia-focused lender HSBC gained 0.9% after it reported an upbeat quarterly profit, meanwhile, UBS declined by 3.5%.