The dollar has won support ahead of an expected interest rate hike by the Federal Reserve

London (AFP) - Stock markets were steady to higher Wednesday ahead of an expected interest rate hike from the US Federal Reserve, traders said.

As euphoria over a historic summit between US President Donald Trump and North Korea leader Kim Jong Un receded, investors re-focused on macroeconomic issues with concerns over global trade causing some discomfort.

“With a rate hike widely expected, investors are focused on the Fed’s statement wording, economic projections and press conference for clarification on the future pace of interest rate hikes,” said Jo Horton, economist at St. George Bank in Sydney.

Key eurozone equity market Frankfurt was higher at the close, while Paris and London were flat, and Wall Street showed slight gains approaching midday in New York.

“The week’s prior events have taken a backseat to today’s Federal Reserve rate decision, with meetings of the European Central Bank and the Bank of Japan looming later in the week,” said Charles Schwab analysts in a note.

Speculation about further interest rate increases was fuelled by data Tuesday showing US inflation at a six-year high in May.

The dollar continued to enjoy some support ahead of the Fed decision, with the pound hamstrung by British Prime Minister Theresa May’s Brexit struggles after she made some big compromises to push through key legislation.

But the euro was up against the greenback ahead of the ECB’s policy meeting on Thursday, as it seeks to wind down its crisis-era stimulus.

- ZTE plunges -

On equity markets, Hong Kong’s main index dropped 1.2 percent with shares in Chinese telecoms equipment maker ZTE collapsing more than 40 percent as it resumed trading after agreeing to pay a massive fine over its handling of a US sanctions violation.

The firm suspended trading in April after Washington said it had banned American companies from selling crucial hardware and software components to it for seven years.

Oil prices rose on the back of a big drop in American oil inventories, as reported by the US Energy Information Administration.

This was a reversal from earlier weakness seen just over a week before OPEC and its partners including Russia meet in Vienna to talk about a production cap deal that has been key to a recovery in the commodity for the past two years.

There are worries OPEC kingpin Saudi Arabia and Russia will push to lift their output ceilings, though they are said to be facing opposition from other members of the cartel, including Iraq.

The International Energy Agency on Wednesday said that an oil production shortfall in Iran and Venezuela may cause OPEC and Russia to decide to open their taps more.

US President Donald Trump meanwhile on Wednesday accused OPEC of driving up oil prices.

- Key figures around 1545 GMT -

London - FTSE 100: FLAT at 7,703.71 points (close)

Paris - CAC 40: FLAT at 5,452.73 (close)

Frankfurt - DAX 30: UP 0.4 percent at 12,890.58 (close)

EURO STOXX 50: UP 0.1 percent at 3,479.56

New York - Dow Jones: UP 0.1 percent at 25,334.08

Tokyo - Nikkei 225: UP 0.4 percent at 22,966.38 (close)

Hong Kong - Hang Seng: DOWN 1.2 percent at 30,725.15 (close)

Shanghai - Composite: DOWN 1.0 percent at 3,049.80 (close)

Euro/dollar: UP at $1.1772 from $1.1746 at 2100 GMT

Pound/dollar: DOWN at $1.3371 from $1.3374

Dollar/yen: UP at 110.41 yen from 110.36 yen

Oil - Brent Crude: UP 61 cents at $76.49 per barrel

Oil - West Texas Intermediate: UP 15 cents at $66.51

burs-jh/spm