Global Market: Asian stock market cautious ahead of Fed, corporate earnings

Global Market: Asian stock markets were cautiously higher on Wednesday as investors paused ahead of the U.S. Federal Reserve`s policy decision while oil prices jumped on hopes demand will pick up as many countries lift some of the coronavirus-related restrictions. In early Asian trade, MSCI`s broadest index of Asia-Pacific shares outside Japan added 0.2% for its third straight day of gains. Japan`s markets were closed for a public holiday.

Australia climbed 0.2% and South Korea rose 0.3%. New Zealand shares slipped 0.6%.

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"The market narrative remained centered around recent competing themes with stimulus and reopening flagged as large tailwinds...accompanied by concerns about behavioural changes in the household and corporate sectors weighing on growth," said Matthew Sherwood, head of investment strategy at Perpetual.

"We remain concerned to the extent that Fed liquidity can offset systemic risks in credit markets."

Markets were looking for any forward guidance from the U.S. Federal Reserve, which is due to issue a policy statement at the close of its two-day meeting on Wednesday. The European Central Bank meets on Thursday.

Analysts said it was unlikely the Fed would make further major policy moves, given the scope and depth of its efforts to counter the economic damage caused by the coronavirus.

On Wall Street overnight, investors dumped tech giants despite an earnings beat from Alphabet Inc`s Google, driving all three major U.S. stock indexes into the red.

The Dow Jones Industrial Average fell 0.3%, the S&P 500 lost 0.5% and the tech-heavy Nasdaq Composite dropped 1.4%.

Investors are next eyeing earnings from the other major tech firms - Facebook, Amazon and Apple.

"There was a big sector rotation as money left high value, growth sectors in tech like Amazon and went to value and cyclical sectors like energy, industrial, financials," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Reassuring UBS earnings lifted European banks nearly 5%, while Wall Street digested upbeat numbers from industrial conglomerate 3M Co, a maker of N95 respirator masks, and drugmaker Pfizer Inc.

In currencies, the dollar weakened against the Japanese yen to 106.60 on concerns the coronavirus could spread further than previously thought if businesses reopened prematurely.