In This Article:
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Traders around the world brace for British election
* Trump to meet advisors on China tariffs
* Dovish Powell comments hurt dollar
* Treasury yields rebound in Asia
By Stanley White
TOKYO, Dec 12 (Reuters) - Asian stocks edged higher on Thursday after the Federal Reserve signalled rate settings were likely to remain accommodative but the imminent UK election and a deadline for Sino-U.S. trade talks kept investors cautious.
Capping broader gains was a fall in oil prices after data showed an unexpected increase in U.S. crude inventories, which hit some energy stocks in the region.
The Fed kept interest rates unchanged, as expected, at its policy meeting on Wednesday but indicated interest rates would remain on hold, which nudged Wall Street stocks higher.
That helped MSCI's broadest index of Asia-Pacific shares outside Japan to rise 0.2%. Japan's Nikkei stock index climbed 0.11% and U.S. stock futures rose 0.06%. Australian shares were down 0.29%, however, weighed by the energy sector after the fall in oil prices.
"The Fed's accommodative stance does support equities, but the chance of a disruptive election outcome in Britain is very real," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"You also have the U.S.-China trade problem. We're likely to see subdued trading and some investors make lock in profits as the day progresses."
The S&P 500 rose 0.29% on Wednesday after the Fed's rate decision, which included enough dovish tones to cheer markets.
Traders are bracing for a series of make-or-break events over the next few days that have the potential to cause huge swings in financial markets for months to come.
Sterling traded near the highest in more than two years versus the euro and close to a eight-month high versus the dollar before voting begins in an election that will determine whether Britain exits the European Union in an orderly fashion.
Polls show the Conservatives' lead shrinking ahead of an election starting later Thursday, which could jeopardise chances of a smooth Brexit.
Exit polls for Britain's election will begin around 2200 GMT Thursday after voting closes, then official results will begin to trickle in.
UK Prime Minister Boris Johnson's ruling Conservative Party is running on a pledge to enact a swift split from the EU, ending more than three years of uncertainty.
Traders say a hung parliament or a victory for the main opposition Labour Party could cause huge disruptions because Labour is promising another referendum on membership of the bloc.