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|13 June, 2018

Asian shares, oil prices drop

Fed is widely expected to raise interest rates for the second time this year

Image used for illustrative purpose. Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, September 7, 2015.

Image used for illustrative purpose. Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, September 7, 2015.

REUTERS/Aly Song

Global markets

The United States Federal Reserve is widely expected to raise interest rates for the second time this year in a meeting on Wednesday.

Asian shares slipped back early on Wednesday as investors awaited the outcome of the Fed’s meeting.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent, erasing the slim gains they made following Tuesday’s meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un.

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“With a rate hike almost fully priced in, the focus is on how many times the Fed will raise rates this year and next, and how much beyond the levels it considers as neutral to the economy, or what they call the longer-run rates,” Shuji Shirota, head of macro economic strategy group at HSBC Securities in Tokyo told Reuters.



During World Cup games, stock market trading volumes tend to drop. The graph shows changes in stock market trading volumes during the 2010 World Cup.

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Middle East markets

Stock markets in the Middle East were mixed on Tuesday, as trading volumes were lower ahead of the Eid Al Fitr holiday.

Dubai’s index dropped 0.6 percent, as Emaar Properties lost 0.8 percent while Commercial Bank of Dubai and courier company Aramex fell by 4.7 percent and 2.4 percent respectively.

Abu Dhabi's index was little changed at 4,734 points, with First Abu Dhabi Bank's shares climbing by 0.7 percent.

The Saudi index rose 0.3 percent, helped by gains in property and financial stocks. Property company Jabal Omar rose 1.8 percent and Dar Al Arkan was up 2.7 percent.

In Qatar, the index lost 0.4 percent, weighed down by a 1.5 percent drop in Qatar National Bank and a 3.2 percent slump for Qatar Gas Transport Company.

Egypt's market firmed by 0.1 percent to 15,938 points, led by banks and property firms.

Kuwait’s index rose 0.6 percent, Bahrain’s index added 0.5 percent and Oman’s index lost 0.1 percent.

Oil prices

Oil prices fell in early trading on Wednesday as rising supplies in the U.S. weighed on prices.

Data from the American Petroleum Institute showed a surprise build of 833,000 barrels in U.S. crude stockpiles. Analysts had expected a decline of 2.7 million barrels.

Official U.S. production and inventory data is due to be published on Wednesday by the Energy Information Administration (EIA).

Brent crude futures, the international benchmark for oil prices, were at $75.65 per barrel at 0329 GMT, down 23 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $65.99 a barrel, down 37 cents, or 0.6 percent, from their last settlement.

Currencies

The dollar was trading higher ahead of the Fed’s meeting.

The dollar index against a basket of six major currencies inched up 0.09 percent to 93.888, after rising 0.25 percent the previous day.

The dollar was 0.25 percent higher at 110.660 yen after brushing 110.68, its highest since May 23.

Precious metals

Gold prices were little changed ahead of the U.S. Federal Reserve's policy decision, which could give cues on future rate hikes.

(Writing Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@thomsonreuters.com)

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