Asia stocks flat ahead of Fed meeting

BANGKOK (AP) Asian stock markets were muted Tuesday as investors braced for a possible first step by the U.S. Federal Reserve toward reducing its massive stimulus program.

The Fed could announce that it is has decided to begin scaling back its massive economic stimulus program as soon as Wednesday, when it concludes a two-day policy meeting.

Though hiring and economic growth in the United States remain soft, the Fed is widely expected to slow the pace of its bond purchases. Its purchases of Treasury and mortgage bonds have been designed to keep long-term loan rates low to get people to borrow and spend and invest in the stock market.

Most economists expect the Fed's initial move to be small a reduction in monthly purchases from $85 billion to $75 billion.

Evan Lucas, market strategist at IG in Melbourne, Australia, said that "there is an air of acceptance in the market for a mild taper" despite data out of the U.S. pointing toward an uneven economic recovery.

While Japan's benchmark index rose slightly after a three day holiday, markets elsewhere struggled to hold onto Monday's gains.

The Nikkei 225 in Tokyo rose 0.1 percent to 14,423.87. Hong Kong's Hang Seng fell 0.3 percent to 23,189.17. South Korea's Kospi fell 0.6 percent to 2,001.54. Australia's S&P/ASX 200 was nearly unchanged at 5,249.80.

World stock markets rose Monday after Lawrence Summers, who had been the leading candidate to replace Fed chairman Ben Bernanke, pulled his name from consideration. Markets responded positively because Summers was thought to favor quickly reducing the Fed's stimulus program, which has been a boon for stock markets.

On Wall Street, the Dow Jones industrial average rose 0.8 percent, to close at 15,494.78. The Standard & Poor's 500 rose 0.6 percent, to 1,697.60. The Nasdaq composite fell 0.1 percent, to 3,717.85.

Benchmark oil for October delivery fell 71 cents to $105.88 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.62 to lose at $106.59 a barrel on the Nymex on Monday.

In currencies, the euro fell to $1.3330 from $1.3335 late Monday. The dollar rose to 99.22 yen from 99.10 yen.

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