Australia

Australian shares are set to open flat as a late rally on Wall Street eased losses after minutes from the latest Federal Reserve meeting broadly met market expectations for monetary policy tightening.

ASX futures were up 2 points at 7205 near 8.00 am AEST, suggesting a positive start to trading.

US stocks ended mixed as investors parsed the minutes of the most recent meeting of the Federal Reserve.

The S&P 500 rose 0.1%, while the Dow Jones Industrial Average fell 0.2%. The Nasdaq Composite lost 0.1%, after being down more than 1% earlier in the session.

Fed officials at their meeting last month talked about stepping up their timetable for raising interest rates beginning with an anticipated increase in March, amid greater discomfort with high inflation.

Locally, the S&P/ASX 200 closed 1.1% higher at 7284.9 on Wednesday as health stocks surged. The benchmark gave back almost all its early gains inside the first hour after opening higher following a positive lead by US stocks, but then ground higher to close at its session high.

Blood products manufacturer CSL, the third-largest ASX company by market capitalization, surged 8.5% after a strong 1H result and positive guidance. The health sector gained 6.2% as imaging company Pro Medicus also added 3.6% following its 1H results.

Consumer and tech stocks gained, but the materials sector gave up 0.4% even as Liontown jumped 18% on its lithium supply deal with Tesla.

Shares in Fortescue Metals fell 2.04% after the miner cut its dividend amid a 32% slide in first half net profit.

Elsewhere overseas, the pan-continental Stoxx Europe 600 rose less than 0.1%. Major indexes in Asia closed higher. Japan's Nikkei 225 jumped 2.2%, and South Korea's Kospi gained 2%. Hong Kong's Hang Seng added 1.5%, and mainland China's Shanghai Composite rose 0.6%.

Turning to commodities, gold futures added 0.9% to $US1873.30 an ounce; Brent crude dropped 1.2% to $US92.14 a barrel; Iron ore advanced 2.9% to US$140.

In bond markets, the yield on the Australian 10-year bond rose to 2.23%. The benchmark US 10-year Treasury yield was flat at 2.04%. Yields fall when prices rise.

The Australian dollar was buying 72.00 US cents near 8.00am AEST, up from the previous close of 71.51. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, fell to 89.60.

Asia

Turning to Asian markets, Chinese shares closed higher amid broad gains in other Asian equities, as concerns over the Ukraine-Russia tensions eased. The Shanghai Composite Index ended 0.6% higher, the Shenzhen Composite Index rose 0.6% and the ChiNext Price Index gained 0.1%. Auto stocks were among the best performers with Great Wall Motor advancing 1.6%, while BYD Co. and SAIC Motor gained 1.0% each. Energy companies were mixed amid news that the chief of the International Energy Agency has called on OPEC+ to increase production. China Petroleum & Chemical Corp. was flat and China Oilfield Services slipped 1.4%.

In Hong Kong, the Hang Seng Index finished 1.5% higher, tracking the recovery of blue chips in the US overnight, after Russia said it had pulled back some troops from the Ukrainian border, KGI Securities says. Casino stocks led gains. Sands China closed 6.8% higher and Galaxy Entertainment Group rose 5.3% after analysts said February gross gaming revenues have remained robust even after the Lunar New Year holidays. "Visitation has continued to track upwards even after Lunar New Year, according to the Macau Government Tourism Office," Daiwa Capital says in a note. Other gainers include BOC Hong Kong, which closed 5.3% higher.

Japanese stocks ended broadly higher, led by especially strong gains in chemical and electronics stocks as fears ease about Russia-Ukraine geopolitical tensions. Bridgestone jumped 7.4% after projecting greater revenue and operating profit for 2022 and announcing a share buyback. The Nikkei Stock Average rose 2.2%. Any developments in the Ukraine situation are in focus. Investors are also paying attention to Covid-19 infection trends in Japan and the government's countermeasures.

Europe

European stocks ended flat as geopolitical uncertainty causes market volatility and pushes oil prices higher. The pan-European Stoxx 600 rose 0.05%.

"Yesterday's relief rally on reports that Russian troops were returning to their bases has given way to more caution," CMC Markets analyst Michael Hewson says. "While the Russians are saying one thing, NATO and the US are reporting that Russian troop numbers are rising near the Ukraine border.”

In London, tensions in Ukraine continued to weigh on markets and the FTSE 100 closed 0.07% lower on Wednesday.

"We've seen a rebound in the oil price after yesterday's steep falls and this appears to be helping the energy sector, which acted as a drag on the FTSE 100 yesterday," CMC Markets UK said.

BP closed 1.6% higher and Shell rose 2.0%.

North America

US stocks ended mixed as investors parsed the minutes of the most recent meeting of the Federal Reserve.

The S&P 500 rose 0.1%, while the Dow Jones Industrial Average fell 0.2%. The Nasdaq Composite lost 0.1%, after being down more than 1% earlier in the session.

Fed officials at their meeting last month talked about stepping up their timetable for raising interest rates beginning with an anticipated increase in March, amid greater discomfort with high inflation.

While the minutes didn't appear to differ from the Fed's public comments, the market seemed to be relieved they didn't show an even more hawkish bent, some analysts said. The argument among investors seems to be whether the Fed will hike 50 basis points in March, or only 25.

"Officials didn't appear to be seriously considering either a 50 bp rate hike to start the tightening cycle or a hike at each of the remaining seven policy meetings this year," said Paul Ashworth, the chief US economist at Capital Economics.

The Fed minutes also shifted the market's attention away from the situation in Ukraine. Russia's Defence Ministry said Wednesday it was withdrawing troops from Crimea following the completion of military drills, as Western intelligence reports that Moscow could invade its neighbour didn't immediately materialize. The North Atlantic Treaty Organization's secretary-general said Russia was continuing its military buildup around Ukraine.

"Every new statement, every tiny piece of news, could push markets in either direction," said Carsten Brzeski, ING Groep's global head of macro research.

The latest inflation data was also sending worrying signals. In the UK, prices rose at their fastest pace in nearly 30 years in January. In the US, retail sales rose 3.8% in January from December, more than economists had expected. The figures are adjusted for seasonality but not inflation, and a number of analysts pointed out that the gains are mainly a result of rising prices.

What the reports reflect is that inflation may be about more than just monetary policy, said Hargreaves Lansdown analyst Susannah Streeter. Energy prices are rising and are a main driver of rising prices, and supply-chain disruptions are still an issue, which is also forcing prices higher, she said. "I wonder whether inflation is going to be quite as transitory as thought," she added.

The market's volatility this week reflects a process that began months ago, as investors react to rising inflation and shifting monetary policy, and is likely just getting started, said Joseph Amato, the chief investment officer for equities at Neuberger Berman.

It showed up first in high-risk assets like crypto and unprofitable tech companies. It's not likely to pummel the broader markets, he said, but it does likely mean the major indexes will not perform like they have the past few years.

This "repricing of risk" will be the biggest factor throughout the year, he said, and investors should be prepared to live with more volatility. "We haven't even seen a single rate hike yet and the market is whipping itself into a bit of a frenzy," he said.

Among individual stocks, ViacomCBS fell 19% and social-gaming company Roblox fell 27% after both posted earnings reports that missed analysts' forecasts.

Shopify fell 17% after the company posted earnings that beat forecasts but it said it expects revenue growth will slow in 2022 from the year prior.

Cedar Fair shares declined 5.4% after SeaWorld Entertainment signalled it was unlikely to pursue a deal for the theme-park business after the company rejected its approach. SeaWorld rose 1.3%.

Airbnb shares rose 4.9% after the company posted record revenue, while Kraft Heinz rose 5.9% after its profit and sales beat expectations. Companies set to post earnings after markets close include Cisco Systems, American International Group and Nvidia.

"You've got this backdrop of inflation, lack of confidence in central banks in being ahead of the curve, a nonorderly recovery in the global economy and supply lines and consumer demand, and all that coming together is creating volatility," said David Coombs, London-based head of multiasset investments at Rathbone Investment Management. Potential escalation between Russia and Ukraine is "the cherry on the top," he added.

In bond markets, the yield on the benchmark 10-year Treasury note settled at 2.044%, flat from 2.044% Tuesday.