China's moves to steady its financial markets with a mixture of curbs and support, combined with investor bets on more help from major central banks, helped stock markets recover some of their recent losses on Wednesday.
U.S. equity futures were up 0.7 percent and European equities were broadly flat at 1157 GMT, building on early relief after Chinese stocks managed to bounce from steep losses .
Commodities stocks were hit hard, however, as U.S. crude fell 84 cents to $44.57 a barrel. Brent crude was down 61 cents to $48.95.
As fears about China's economic slowdown and its impact on world growth rattle markets, its central bank has pumped cash into the economy and investors now bet the U.S. Federal Reserve will delay an interest rate rise that had been expected as early as this month.
U.S. private employment data due later on Wednesday, a precursor to Friday's critical non-farm payroll data, is expected to show firms added more jobs in August than July.
"The general level of volatility is going to stay for some time. People are still nervous despite several policy responses in China," Clairinvest fund manager Ion-Marc Valahu said, adding he did not expect the market to close at a new low.
With the European Central Bank meeting on Thursday, traders said there were growing expectations for a dovish stance to soothe markets. The ECB launched its bond-buying scheme, or quantitative easing, this year and it has pledged to intervene further if needed.
"Investors are keenly awaiting (ECB President Mario) Draghi's press conference tomorrow and a lot of investors are not taking major positions ahead of that," said RIA Capital Markets strategist Nick Stamenkovic.
"The likelihood is that he is going to adopt a dovish posture given the rising global headwinds and the market will pay particular attention to the inflation forecasts for 2016 and 2017."
German 10-year yields, the benchmark for euro zone borrowing costs, were 3 basis points down at 0.78 percent, retreating from a two-week high of 0.82 percent hit on Monday. Yields on other top-rated bonds were down a similar amount.
The dollar rose as steadier markets took the heat out of a rush to unwind carry trades that boosted the safe-haven yen and the low-yielding euro in recent weeks.
"There has been a moderation in risk aversion with European stocks and Wall Street stock futures in the green. That has seen the yen give up some of its recent gains," said Alvin Tan, currency strategist at Societe Generale.
"U.S. payrolls will be the focus, but I doubt it will change the current debate over whether the Federal Reserve will hike rates in the near term or not."
Emerging market stocks fell for the third straight day, down half a percent and approaching recent 6-year lows while the rouble extended the previous session's 3.8 percent fall against the dollar which was the biggest one-day loss in three months.
The rouble was down 2 percent against the dollar, adding to the previous day's 3.8 pct loss which was the biggest one day fall in three months. Russian 5-year credit default swaps rose 15 basis points to two-week highs. The moves come as oil prices slide further and the West extends sanctions against Moscow.
Asian shares fell for a third straight day on Wednesday as weak manufacturing reports from China, the United States and Europe fuelled worries about slowing global growth. (Reuters)
Source: www.businessworld.ie
