Shares surge ahead of Fed's rate decision, as Trump's Asian tour sends Nikkei to record

World shares were mostly higher on Wednesday ahead of an interest rate decision by the US Federal Reserve.

Japan's benchmark Nikkei 225 index surged more than 2 per cent to another record as US President Donald Trump continued his charm offensive in Asia.

His upbeat comments on relations with major economies like Japan and China have helped stoke market rallies as US stocks push further into record heights.

Germany's DAX edged 0.1 per cent lower to 24,263.51, while the CAC 40 in Paris was flat, at 8,214.15. Britain's FTSE 100 picked up 0.5 per cent to 9,744.44.

The future for the S&P 500 was up 0.1 per cent while that for the Dow Jones Industrial Average slipped 0.3 per cent.

Later on Wednesday, the Federal Reserve was to announce its latest move on interest rates.

Investors expect the Fed to announce a rate cut given the slowing job market. It would be the second time this year that it's lowered the federal funds rate.

Given the lack of statistical updates due to the nearly monthlong US government shutdown, Fed officials may opt for caution, analysts said.

“In the absence of fresh data, policymakers are effectively acting half-blind, but the market widely expects a 25-basis-point rate cut,” Ipek Ozkardeskaya of Swissquote said in a commentary.

In Asian trading, Tokyo's Nikkei 225 jumped 2.2 per cent to 51,307.65.

After a visit in Japan that culminated in $490 billion in investment commitments, President Donald Trump met with South Korea's leader on Wednesday, though a trade deal with that country appeared more elusive.

Top officials in Washington and and Seoul say the sticking point for an agreement continues to be the logistics behind Trump's demand that South Korea invest $350 billion in the US.

Still, South Korea's Kospi rose 1.8 per cent to 4,081.15.

The Shanghai Composite index surged 0.7 per cent at 4,016.33. It has been trading near decade highs ahead of Trump's expected meeting with Chinese leader Xi Jinping on the sidelines of a regional summit in South Korea.

Trump and Xi have been locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls and China retaliating with curbs on rare earth shipments, one of its key sources of leverage.

The fact that a meeting is planned suggests there is room for some progress in easing tensions, experts say.

Australia's S&P/ASX 200 declined 1 per cent to 8,926.20 after the release of higher than expected inflation data, an annual rate of 3.2 per cent, dashed hopes for an interest rate cut anytime soon.

Taiwan's Taiex gained 1.2 per cent and India's Sensex rose 0.4 per cent.

On Tuesday, the S&P 500 added 0.2 per cent and the Dow industrials rose 0.3 per cent. The Nasdaq composite climbed 0.8 per cent. All three indexes set all-time highs for a third straight day.

Microsoft Corp. was one of the strongest forces lifting the market, rising 2 per cent and once again surpassing $4 trillion in valuation. It joined artificial intelligence chipmaker Nvidia in the exclusive club that also briefly included Apple on Tuesday. The sky-high valuations highlight the investor frenzy around artificial intelligence.

Amazon, meanwhile, rose 1 per cent after saying it will cut about 14,000 corporate jobs, or about 4 per cent of its corporate workforce, as it ramps up spending on artificial intelligence while cutting costs elsewhere.

In other dealings early Wednesday, US benchmark crude oil inched up 11 cents to $60.26 a barrel. Brent crude, the international standard, rose 13 cents to $63.96 a barrel.

The US dollar rose to 152.24 Japanese yen from 152.11 yen. The euro slipped to $1.1644 from $1.1651.