World Markets Waver After Fed Talk

HONG KONG (AP) -- World stock markets wavered Thursday after the Federal Reserve sounded a note of caution on the world economy and its effect on U.S. growth but left the door open for rate hikes.

KEEPING SCORE: European stocks dipped in early trading. France's CAC 40 was down 0.1 percent to 4,375.03 and Germany's DAX dropped 0.3 percent to 9,850.84. Britain's FTSE 100 edged up 0.1 percent to 5,997.10. U.S. stocks were poised to open higher, with Dow futures rising 0.7 percent to 15,963.00. Broader S&P 500 futures added 0.9 percent to 1,891.90.

POLICY PACE: The Federal Reserve issued a cautious assessment of the global economy while also downgrading its view of U.S. growth, after officials from the central bank wrapped up their latest policy meeting Wednesday. The Fed's December rate hike had raised expectations of several more increases this year, with the first as early as March. That was a prospect that unsettled investors used to years of easy credit fueling a boom in stock markets. However, in their latest statement, officials suggested that if stock market turmoil and global economic weakness persist, they might slow down the pace of interest rate hikes though they gave themselves room to maneuver by not committing outright to a delay.

ANALYST VIEW: "The Fed dropped the 'reasonably confident' belief that inflation would return to 2 percent, and 'monitoring global economic and financial developments' reappeared" in its statement, Angus Nicholson of IG in Melbourne said in a report. "Both of these indicate that global risks, and China in particular, are likely to put a bit of a pause on the hiking cycle in March and April."

ASIAN SCORECARD: Japan's benchmark Nikkei 225 index gave up early gains to end 0.7 percent lower at 17,041.45. South Korea's Kospi added 0.5 percent to 1,906.94. Hong Kong's Hang Seng zigzagged before finishing 0.8 percent higher at 19,195.83. The Shanghai Composite Index in mainland China was fairly steady for most of the day until dropping steeply in the last hour, closing 2.9 percent lower at 2,655.66. Australia's S&P/ASX 200 advanced 0.6 percent to 4,976.20. Benchmarks in Taiwan, Singapore, the Philippines and Indonesia rose but Thailand fell.

ENERGY: Benchmark U.S. crude dipped 2 cents to $32.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 85 cents, or 2.7 percent, to close at $32.30 a barrel on Wednesday in New York. Brent crude, the benchmark for international oils, added 5 cents to $33.97 a barrel in London.

CURRENCIES: The euro slipped to $1.0877 from $1.0905. The dollar rose to 118.88 yen from 118.46 yen.

(KA)