Global Markets Rise, Follow China Gains

Global stock markets edged higher Wednesday tracking a slight rebound in Chinese equities, but trading volumes were expected to remain thin and investors cautious ahead of a policy statement from the U.S. Federal Reserve.

The Stoxx Europe 600 was 0.4% higher around half way through the session in Europe, building on Tuesday's 1.1% gain.

In the U.S., futures contracts showed the S&P 500 opening just over 0.2% higher having also rallied Tuesday. Futures, however, don't always accurately predict moves after the opening bell.

China's shares oscillated between gains and losses Wednesday before closing higher as officials stepped up efforts to calm markets on the back of three days of selling that knocked 11% off the value of China's main stock index.

"Sentiment toward China remains highly volatile," said Ian Williams, an economist and strategist at brokerage Peel Hunt in London. He added, however, that investors broadly appear calmer earlier Wednesday than they might have done a day ago.

Alaistair McCaig, an analyst at brokerage IG, agreed that fears over the Chinese equity markets had eased, at least for the time being.

"European equity markets appear to have collectively decided enough is enough," he said, adding that some investors were taking advantage of a selloff in Europe early in the week to buy back at a more attractive price.

Gains in Europe were also spurred by some stronger-than-expected corporate earnings.

Shares in British food ingredients company Tate & Lyle PLC surged close to 8% after the group reiterated its full-year guidance and reported earnings in line with expectations.

British American Tobacco PLC and Barclays PLC also rallied on solid results. The British bank announced it was scrapping its dividend target to retain capital.

Later in the session, investors' attention will focus on the U.S. Fed's policy statement.

Chairwoman Janet Yellen isn't scheduled to host a news conference and the Fed won't publish any fresh economic projections, but officials could provide hints on the economy's trajectory.

"We're looking for any small changes in language on the margin but don't expect anything committal at this point," said Christopher Chapman, a London-based portfolio manager at Manulife Asset Management, adding that many investor are taking a "wait-and-see approach" ahead of the statement.

"What we are likely to get is a Fed that emphasizes data dependency, and this therefore perhaps makes the forthcoming data more important than the Fed decision today," said Paul Donovan, an economist at UBS.

A first reading for second-quarter U.S. gross domestic product, the broadest sum of goods and services produced across the economy, is due Thursday.

The euro was little changed against the dollar at $1.1069. The dollar was also broadly flat against Japan's yen at Yen123.57.

In commodity markets, Brent crude was 0.5% lower at $53.03 a barrel having hit its lowest level since January on Tuesday amid concerns about the persistent global oil glut. Gold was flat at $1,095.80 a troy ounce.